Wednesday, November 23, 2011

20111123 1811 FCPO EOD Daily Chart Study.

FCPO closed : 3161, changed : -14 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded small loss with declined volume exchanged while overnight soy oil closed recorded substantial gains and currently trading lower surrendered all yesterday gains while crude oil price also retreating lower.
Higher U.S. Dollar and poor global equity market performance pressured soy oil price to u turned lower after overnight recorded gains. Back home, news on China cancelled about 300,000 tonnes of palm oil order for the past 1 month resulted FCPO to trade lower tested new 8 days low followed by mild bargain hunting lifted price to rebounded off the low.
Daily chart formed a doji bar candle closed nearer to middle Bollinger band level after market opened lower, climb upwards into positive zone and eased little lower followed by after lunch session gap down and sliding lower before recovered upwards to closed at today opening price.
Chart reading still 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.

20111123 1730 FKLI EOD Daily Chart Study.

FKLI closed : 1418.5, changed : -5.5 points, volume : lower.
Bollinger band reading : pullback correction little downside biased.
MACD Histrogram : falling, seller taking exposure.
Support : 1400, 1395, 1385, 1375 level.
Resistance : 1420, 1425, 1435, 1440 level.
Comment :
FKLI closed recorded loss with decreased volume participation doing 14.5 points discount compare to cash market that ended lower. Overnight U.S. markets ended recorded small loss and today Asia markets closed recorded loss while European markets currently swing between gain and losses.
Slower than estimates U.S. 2% GDP reported, reports on possible slowing China manufacturing for this month and higher European bond yield send global markets lower. Markets also awaits tonight U.S. durable goods order and personal spending reports.
Daily chart formed a down doji bar candle positioned at lower Bollinger band level after market opened and traded lower followed by last hour upward recovery before eased little lower to closed off the high of the day.
Technical reading remained suggesting a pullback correction little downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111123 1656 Regional Markets EOD Daily Chart Study.

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

20111123 1614 FCPO Breaking News.

Reuters :
Major Chinese state owned trading firm has cancelled about 100,000 tonnes of palm oil last week. - source: traders

China has cancelled up to 300,000 tonnes of palm oil over the past 1 month. - source: traders.

20111123 1610 Global Market & Commodities Related News.

Asian Stocks, Oil Drop on Economic Concerns; Mining Shares Sink
Nov. 23 (Bloomberg) -- Asian stocks fell to the lowest in more than six weeks while U.S. equity futures and oil dropped on concern global economic growth will falter amid Europe’s debt crisis. Shares of Australian mining and steel companies slumped as the nation’s lower house of parliament passed a resources tax. The MSCI Asia Pacific excluding Japan Index sank 2.1 percent at 1:07 p.m. in Hong Kong, set for the lowest close since Oct. 6, and Australia’s S&P/ASX 200 Index retreated 1.8 percent. Standard & Poor’s 500 Index futures slipped 1.2 percent. Oil fell 1.1 percent in New York. The Australian dollar weakened against all 16 major counterparts, South Korea’s won tumbled a fourth day, and the euro declined versus the dollar and yen. The cost of insuring Asia-Pacific debt from non-payment rose. Data today showed China’s manufacturing may have contracted this month, and separate figures may show European manufacturing and services shrank and U.S. durable goods orders fell.
Figures yesterday showed the world’s largest economy grew less than estimated last quarter, amid minutes from the Federal Reserve’s last meeting that showed some policy makers thought monetary easing may be necessary. “What we’re seeing is stalling speed in the U.S.,” Viktor Shvets, a Hong Kong-based strategist at Samsung Securities Co., said in a Bloomberg Television interview. “The euro zone is clearly heading into recession.”  More than seven shares declined for every one that gained in MSCI’s Asia Pacific ex-Japan Index. South Korea’s Kospi index sank 2.2 percent, Hong Kong’s Hang Seng Index slid 1.8 percent and China’s Shanghai Composite Index decreased 0.5 percent. Japan’s financial markets are closed for a holiday today.

Shares slide on China flash PMI, US growth fears
SINGAPORE, Nov 23 (Reuters) - Asian shares, U.S. futures and oil fell as a weak Chinese manufacturing survey renewed fears of a hard landing for the world's No. 2 economy, exacerbating worries about faltering global growth following a downward revision of U.S. GDP data.
"If it gets much thinner, it's going to stop," said Martin Angel, a dealer at Patersons Securities in Perth.

China Manufacturing May Shrink This Month (Bloomberg)
China’s manufacturing may contract this month by the most since March 2009 as home sales slide, adding to evidence the world’s second-biggest economy is slowing, a preliminary purchasing managers’ index shows. The reading of 48 reported by HSBC Holdings Plc and Markit Economics today compares with a final number of 51 last month. A number below 50 indicates a contraction. Europe’s sovereign-debt crisis threatens to cut export demand just as small businesses complain of a credit squeeze, and Premier Wen Jiabao’s campaign to cool home prices triggered a 25 percent slump in sales last month. Today’s Chinese data indicated easing inflation pressures that leave more room for measures to boost growth after the U.S. yesterday reported a weaker-than-estimated expansion.

Hong Kong Stocks Fall, Headed for Six-Week Low on U.S. Economy
Nov. 23 (Bloomberg) -- Hong Kong stocks fell, with the Hang Seng Index headed for its lowest close in six weeks, after a report showed the U.S. economy expanded less than economists estimated, damping the outlook for Asian exporters. Li & Fung Ltd., a clothing and toy supplier that gets 65 percent of its sales in the U.S., slid 3.3 percent. China Resources Land Ltd., a state-controlled developer, lost 2.3 percent on concern property sales are declining. Asian Citrus Holdings Ltd., an operator of orange plantations in China, sank 4.4 percent after a report the company plans to raise money by placing shares. This was denied by the company’s finance director. The Hang Seng Index fell 1.9 percent to 17,906.96 as of 10:02 a.m. local time, headed for its lowest close since Oct. 10. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong retreated 2.6 percent to 9,496.96. Futures on the Hang Seng Index slid 1.5 percent to 17,898.
The HSI Volatility Index gained 1.1 percent to 34.91, indicating options traders expect a swing of 10 percent in the benchmark over the next 30 days.

FOREX-Dollar up on Dexia rescue doubts, weak China data
SINGAPORE, Nov 23 (Reuters) - The dollar rose broadly on Wednesday as the euro dipped on jitters over the fate of a rescue plan for Franco-Belgian bank Dexia, while the Australian dollar fell on data showing China's factory activity slumped to a 32-month low.    
"With all the woes in EU, I cannot help to be bearish euro versus the dollar," said a trader for a Japanese bank in Singapore.

Corn, wheat steady as crude's gain offsets euro zone worries
KUALA LUMPUR, Nov 23 (Reuters) - U.S. grain futures were steady in Asian trade, holding on to gains from the previous session, as high crude oil prices outweighed concern that Europe's sovereign debt crisis will slow global economic growth and curb consumption.
High crude prices may increase demand for bio-diesel, boosting competition for grains such as corn and soybeans.

Brazil sugar expansion slows, other origins emerge
SAO PAULO, Nov 22 (Reuters) - The expansion of Brazil's world leading sugar sector to meet growing international demand is set to slow and other origins will emerge as suppliers, delegates at an industry conference said on Tuesday.
Farideh Bromfield, head of commodity research at trade house ED&F Man, said at the Datagro conference that Brazil's roller coaster expansion as a sugar exporter was set to decelerate in the face of buoyant global demand.

EU may extend zero import duty on feed wheat, barley
BRUSSELS, Nov 22 (Reuters) - The European Union's cereals management committee may vote on Thursday to extend the suspension of the bloc's import duties on feed wheat and barley until June 30 2012, a draft agenda of the meeting seen by Reuters showed.
In June, the EU suspended its import duties of 12 euros per tonne for low- and medium-quality wheat and 16 euros a tonne for feed barley until Dec. 31, in response to a spring drought that hit supplies of animal fodder.
Brazil cane industry confronts its output limits
SAO PAULO, Nov 22 (Reuters) - Brazil's once booming cane sector is coming to grips with its own limits and curbing unrealistic expectations, after a frustrating harvest and a still unclear investment environment ahead.
After the years of euphoria that ended with the 2008 global financial crisis, the industry is now adopting a more relaxed approach when talking about prospects for sugar and ethanol production over the next few years. Demand forecasts however remain bright.

India agrees 1 mln tonnes of sugar exports-minister
NEW DELHI, Nov 22 (Reuters) - India has decided to allow one million tonnes of white sugar exports, Trade Minister Anand Sharma said on Tuesday, double initial expectations from the world's second-biggest producer and sending global prices lower. "We have to balance the interest of farmers, consumers and the industry. There was a demand for three million tonnes but we allowed only one million tonnes, keeping in view the interest of all the stakeholders," Food Minister K. V. Thomas told reporters.
Importers turn to palm oil from soyoil - Oil World
HAMBURG, Nov 22 (Reuters) - Uncompetitive soyoil prices and tight export supplies are pushing consumer demand towards cheaper palm oil and sunflower oil, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Soyoil has lost price competitiveness against palm and sun oil, Oil World said. Palm oil is currently about $100 cheaper than U.S. fob soyoil prices and $60 cheaper than Brazilian and Argentine soyoil, Oil World data shows.

Brent oil falls near $108 as U.S., China growth slows
SINGAPORE, Nov 23 (Reuters) - Brent crude fell near $108 as data from the United States and China showed a slowdown in economic growth, stoking fears of weaker demand from the world's two largest oil users.
"The short-term reaction will be negative, but China will probably start monetary easing measures that will be positive for commodities in the medium term," ANZ analyst Natalie Robertson said.

Venezuela-China oil firms to boost output by 2014
CARACAS, Nov 22 (Reuters) - Oil companies formed as joint ventures between Venezuela and China will produce 1.1 million barrels per day (bpd) by 2014, up from 112,000 bpd at present, Venezuelan Oil Minister Rafael Ramirez said on Tuesday.
Ramirez said that Venezuela and China have agreed on the terms for a new Chinese loan worth $4 billion for oil projects and that the agreement will be signed on Wednesday by socialist President Hugo Chavez.

Copper cuts gains on weak China factory data
SINGAPORE, Nov 23 (Reuters) - Copper trimmed gains after data showing factory activity in top consumer China fell to its lowest in 32 months, but hopes that the weak numbers may prompt Beijing to relax monetary policy kept the metal firm.
"It's a weak number and well below expectations. Copper certainly trimmed gains on the back of it. We could see more weakness in prices later in the day, but this data must spur the Chinese authorities to loosen policy," said Nick Trevethan, senior commodities strategist at Australia and New Zealand Bank.

Australia's mining tax passes biggest political hurdle
CANBERRA, Nov 23 (Reuters) - Australia's plan to impose a 30 percent tax on its booming iron ore and coal sectors cleared its biggest political hurdle on Wednesday when legislation passed parliament's lower house after a last-minute deal to win support from the influential Greens.
The vote is a major victory for Prime Minister Julia Gillard's Labor Party after 18 months of acrimonious debate that brought down former prime minister Kevin Rudd. Mining companies ran a public campaign against his original 40 percent tax plan.
Refined copper deficit 161,000 T in Jan-Aug - ICSG
LONDON, Nov 22 (Reuters) - The world refined copper market was in deficit of 161,000 tonnes in the first eight months of the year, compared with a deficit of 339,000 tonnes in the same period last year, an industry report showed on Tuesday.
The global refined copper market was in a production deficit of 45,000 tonnes in August, the International Copper Study Group (ICSG) said in its latest monthly bulletin.

Global copper demand remains robust -Aurubis
HAMBURG, Nov 22 (Reuters) - Global copper demand remains firm despite fears of an economic slowdown and key consumer China is likely to raise imports again in November, Aurubis , Europe's biggest copper producer, said on Tuesday.
"The general view that demand is suffering due to economic concerns does not seem to fit with the inventory trend in the metal exchange warehouses," Aurubis said in a report. "Copper production does not meet the requirements."

METALS-Copper cuts gains on weak China factory data
SINGAPORE, Nov 23 (Reuters) - Copper trimmed gains on Wednesday after data showing factory activity in top consumer China fell to its lowest in 32 months, but hopes that the weak numbers may prompt Beijing to relax monetary policy kept the metal firm.
"It's a weak number and well below expectations. Copper certainly trimmed gains on the back of it. We could see more weakness in prices later in the day, but this data must spur the Chinese authorities to loosen policy," said Nick Trevethan, senior commodities strategist at Australia and New Zealand Bank.

PRECIOUS-Gold hovers around $1,700; euro zone eyed
SINGAPORE, Nov 23 (Reuters) - Gold prices traded steady around $1,700 on Wednesday, after buying related to options' expiration lifted prices by more than 1 percent in the previous session, as investors continue to watch the unfolding euro zone debt crisis.
"Prices will probably trade between $1,680 to $1,700 for the rest of the week as investors prefer to stay out of the market with cash in hand," said Ronald Leung, a dealer at Lee Cheong Gold Dealers.

Gold hovers around $1,700; euro zone eyed
SINGAPORE, Nov 23 (Reuters) - Gold prices traded steady around $1,700, after buying related to options' expiration lifted prices by more than 1 percent in the previous session, as investors continue to watch the unfolding euro zone debt crisis.
"Prices will probably trade between $1,680 to $1,700 for the rest of the week as investors prefer to stay out of the market with cash in hand," said Ronald Leung, a dealer at Lee Cheong Gold Dealers.

20111123 1207 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian shares drift lower as growth fears hit miners
SINGAPORE, Nov 23 (Reuters) - Asian shares drifted lower on Wednesday, weighed down by mining and technology stocks after a downward revision of U.S. growth data raised new concerns about the faltering global economy.
The euro crept up after the International Monetary Fund beefed up its lending tools to help shield some smaller countries from the euro zone debt crisis.

Asian Stocks Decline After U.S. Growth Slows, Australia Passes Mining Tax
Asian stocks fell, with a regional gauge heading for its lowest close in a month, as a mining tax was approved in Australia and reports showed slower-than- expected economic growth in the U.S. and a slowdown in China’s manufacturing. Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, slid 2.3 percent in Seoul on speculation exports will drop as growth in the world’s biggest economy slows. BHP Billiton Ltd. (BHP), the world’s biggest mining company, declined 2.7 percent in Sydney after Australia’s House of Representatives passed a law taxing mining profits. Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, fell 2.1 percent after a report showed China’s manufacturing may have contracted. “Companies in the U.S. are quite cautious given the European situation,” said Ng Soo Nam, the Singapore-based chief investment officer at Nikko Asset Management Asia Ltd., which oversees about $165 billion. “Some countries in Europe will probably go into recession.
Europe cannot drag its feet anymore. Chinese data suggest small and medium-sized manufacturers are already feeling the effects of the liquidity crunch.”

COMMODITIES-Oil gains on Iran, bargain hunters buy metals
NEW YORK, Nov 22 (Reuters) - Oil rose 2 percent on Tuesday, hit by fears of supply dislocations as sanctions against Iran were strengthened, and copper and gold each gained around 1 percent as investors found value at low levels hit a day earlier, when most commodities fell sharply.
"It's Iran sanctions, Egypt and Syria and even Libya today, putting the fear premium into prices, especially ahead of the holiday," said Dominick Chirichella, senior partner, Energy Management Institute in New York.

Venezuela-China oil firms to boost output by 2014
CARACAS, Nov 22 (Reuters) - Oil companies formed as joint ventures between Venezuela and China will produce 1.1 million barrels per day (bpd) by 2014, up from 112,000 bpd at present, Venezuelan Oil Minister Rafael Ramirez said on Tuesday.
Ramirez said that Venezuela and China have agreed on the terms for a new Chinese loan worth $4 billion for oil projects and that the agreement will be signed on Wednesday by socialist President Hugo Chavez.

Libya's 2012 oil supply deals due in a fortnight
ISTANBUL, Nov 22 (Reuters) -  Libya's National Oil Corporation (NOC) will inform the winners for its 2012 crude oil contracts within the next two weeks, a senior NOC official told Reuters on Tuesday, as a handful of top officials meet with around 50 hopeful clients from oil majors and top trading houses this week.
The process will determine who wins the best access to the OPEC member's prized light, sweet oil with daily exports worth a nominal $141 million a day once exports return to full flows following wartime disruptions.

Oil up on Iran dispute, IMF lending moves
NEW YORK, Nov 22 (Reuters) - Oil prices rose in choppy trading on Tuesday as efforts to strengthen sanctions on Iran and regional unrest hiked the geopolitical fear premium and offset worries about global economic growth.
"It's Iran sanctions, Egypt and Syria and even Libya today, putting the fear premium into prices, especially ahead of the (U.S. Thanksgiving) holiday," said Dominick Chirichella, senior partner, Energy Management Institute in New York.

Natural gas ekes out gain; cash, crude support
NEW YORK, Nov 22 (Reuters) - U.S. natural gas futures ended higher for a second straight day on Tuesday, boosted along with cash gas by some cooler weather forecasts that should bring about a first round of winter heating demand, traders said.
"After selling off over the last few weeks, natural gas prices have bounced off technical support in the $3.30 level to finish up on the day. However, bearish technicals and fundamentals should continue to limit the recent upside move and are likely to lead to a retest of the $3.20 level over the short-term," said Caprock Risk Management president, Chris Jarvis.

Euro Coal-Prices rise with oil
LONDON, Nov 22 (Reuters) - Prompt physical coal prices rose by around 50 cents a tonne on Tuesday in line with gains in oil and European power prices but trading activity remained thin.
Brent crude rose on Tuesday as efforts to impose stricter sanctions on Iran hiked the geopolitical fear premium and helped offset worries about economic growth and oil demand.

20111123 1107 Global Economic Related News.

China: Cuts some reserve ratios in Zhejiang, market news reports
China’s central bank cut reserve requirements for five rural credit cooperatives in the eastern province of Zhejiang, Market News International said, citing three unidentified people in the interbank market. Bond traders said the reduction to 16% from 16.5% would have a tiny impact on overall liquidity because of the small size of the banks, the news agency said yesterday. The central bank’s press office declined to comment immediately. The city of Wenzhou in Zhejiang has been the focus of complaints by small businesses that they face a credit squeeze after the government tightened monetary policy to cool inflation and the property market. The Shanghai Composite Index has fallen 14% this year on concern that the world’s second-biggest economy faces a deeper slowdown. (Bloomberg)

Sri Lanka: Devalues LKR, plans tax cuts to support growth
Sri Lanka said it devalued its rupee and plans to cut taxes to spur economic growth as Europe’s debt crisis spoils export demand. The central bank has given a guidance to state banks to buy USD at LKR113.50 and sell at LKR113.90 to help weaken the local currency by 3%, Governor Ajith Nivard Cabraal said. The move was first announced by President Mahinda Rajapaksa yesterday in his budget speech, as he also unveiled proposals to raise salaries for civil servants and increase spending in 2012. Asian nations including the Philippines, Indonesia and Malaysia have taken fiscal or monetary stimulus steps this year, while the SLR has slumped 14.6% against the USD in 2011. The SLR had gained 0.5% this year before today’s depreciation, making the nation’s goods relatively expensive in overseas markets. (Bloomberg)

EU: November consumer confidence drops to 2-year low
European consumer confidence dropped to the lowest in more than two years in November, as the economy edged toward a recession and companies eliminated jobs. An index of household sentiment in the 17-nation euro area fell to -20.4 from -19.9 in Oct, the Brussels- based European Commission said in an initial estimate. That’s the lowest since Aug 2009. Economists had forecast a drop to minus 21, the median of 28 estimates in a Bloomberg survey showed. Confidence has weakened for five straight months, the longest stretch of declines since 2008. (Bloomberg)

US: Fed tells top banks to submit annual capital plans
The Federal Reserve told the 31 largest US banks to test their loan portfolios and trading books against a deep recession and a European market shock. The test’s severest point will assume a 13% jobless rate and an 8% decline in US GDP. Bank-holding companies with assets of USD50bn or more are being asked as part of their 2012 capital plan review to project revenues, losses and capital positions through the end of 2013 using four different scenarios, two provided by the Fed and two defined by the banks. (Bloomberg)

US: Supercommittee failure threatens recovery as rating affirmed
The implosion of the congressional supercommittee is likely to delay any major deficit-reduction agreement until after the next presidential election and may pose an immediate threat to the struggling US economy. The committee’s failure to reach a deal means several tax programs, including a payroll tax holiday, risk expiring at the beginning of next year, weighing on the household spending that accounts for about 70% of the world’s largest economy. The panel’s inability to agree on USD1.2trn in budget cuts stoked doubts about US lawmakers’ ability to overcome partisan gridlock and deal with the nation’s fiscal future. (Bloomberg)

US: Inventory drop sets stage for growth pickup
The economy in the US expanded less than previously estimated in the third quarter, reflecting a drop in inventories that points to a pickup in growth as 2011 comes to a close. GDP climbed at a 2% annual rate from July through Sept, less than projected and down from a 2.5% prior estimate, revised Commerce Department figures showed. The median forecast of 81 economists surveyed by Bloomberg News called for no revision. Excluding stockpiles, so-called final sales climbed 3.6%, the most since last year’s fourth quarter. (Bloomberg)

20111123 1105 Malaysia Corporate Related News.

Ambang Sehati mulls higher stake in BRDB
Bandar Raya Developments (BRDB) said its majority shareholder Ambang Sehati SB is exploring the possibility of increasing its stake in the company via various means The proposal from Ambang Sehati, which holds an 18.85% stake in the company, may or may not result in a general offer, BRDB told the local exchange yesterday. (Malaysian Reserve)

Samalaju water treatment plant ready in 2013
Sarawak-based Hock Seng Lee’s (HSL) RM90.28m rural water treatment plant project in Samalaju is expected to be completed in the second quarter of 2013. Its group MD Datuk Paul Yu Chee Hoe said the project in Samalaju, one of the growth nodes in the Sarawak Corridor of Renewable Energy (SCORE), is currently underway. (Malaysian Reserve)

Hwang-DBS and AFG in possible merger exercise
The market is rife with talk that Hwang-DBS (Malaysia) and Alliance Financial Group (AFG) are looking at a merger exercise. A key player in the talks is said to be Singapore banking giant DBS Group Holdings. DBS Bank owns 28% of investment bank Hwang-DBS and it has been long rumoured that DBS might also secure a controlling stake in AFG by buying over Temasek Holdings’ indirect 29% stake in AFG. (StarBiz)

TdC gets nod to buy 3 firms
Time dotCom (TdC) has received the nod from its minority shareholders for the proposed acquisition of three companies for RM322m. Its CEO Afzal Abdul Rahim said the group could now pursue its plan to become a regional player with the Asia-Pacific market being its main focus. (StarBiz)

Firefly CEO calls it a day after nine years with MAS
Datuk Eddy Leong has called it a day at MAS. Sources said he submitted his resignation letter to the new management of the airline yesterday. Leong is believed to be negotiating on the date he could leave because there needed to be a transition period for the handover of duties. (StarBiz)

DRB-HICOM plans RM500m sukuk
DRB-Hicom is planning to sell RM500m of Islamic bonds to fund working capital and refinance debts, according to a note sent to investors. The syariah-compliant debt, or sukuk, which pay returns from assets that comply with the religion’s ban on interest, was part of an existing RM1.8bn medium-term programme, the note said. (StarBiz)

TSH aims to be major regional player
TSH Resources aims to become a regional plantation player in the next few years by expanding its planted hectarage specifically in Indonesia. TSH chairman Datuk Dr Kelvin Tan Aik Pen said the company is on a solid financial footing and well positioned for strong earnings growth in the future. TSH group MD Datuk Tan Aik Sim said the company has a large unplanted area of about 60% for expansion and plans to spend between RM100m and RM120m per year to expand its activities. (BT)

AirAsia 3Q net profit falls 53.5% to RM152.3m  AirAsia’s net profit for the 3Q2011 fell 53.5% to  RM152.3m from RM327.3m a year earlier, due  mainly to higher fuel expense and staff costs. The airline said that revenue for the quarter rose 9.9%  to RM1.08bn from RM979.7m in 2010. EPS for the quarter fell to 5.50sen from 11.90sen in 2010. For  the 9MFY2011, AirAsia’s net profit fell 42.9% to RM428.5m from RM750.3m in 2010, despite posting  an increase in revenue to RM3.2bn from RM2.78bn. (Financial Daily)

KNM posts net loss RM116.3m in 3Q  KNM Group posted net loss RM116.3m for 3Q2011 compared to net profit RM56.1m a year earlier,  due mainly to one off provision for foreseeable losses and credit impairments. Revenue for the  quarter rose 6.41% to RM445.2m from RM418.4m in 2010. Loss per share for the quarter was  11.88sen compared to EPS of 5.69sen a year earlier. There was no dividend declared or  recommended during quarter under review. However, KNM said it had adopted a dividend policy of  distributing at least 50% of its consolidated net attributable after tax profit (subject to the availability  of distributable reserves and compliance of financial covenants) with effect from FY2012. For the  9MFY2011, KNM posted net loss RM86.4m compared to net profit RM110.6m in 2010, while its  revenue grew 19% to RM1.4bn from RM1.17bn. (Financial Daily)

Petronas Chemicals posts net profit RM1.15bn, declares 8sen interim dividend  Petronas Chemicals posted net profit RM1.15bn  for the 1Q2012 on the back of revenue RM4.66bn,  due mainly to higher product prices and unrealised foreign exchange gains. EPS for the quarter was  14sen. The company declared an interim single tier dividend of 8sen per ordinary share or RM640m  for the FY2011, to be paid on Dec 22. For the 6MFY2011, PCG posted net profit RM1.89bn on the  back of revenue of RM7.98bn. (Financial Daily)

Better margins boost BDRB 3Q earnings to RM28.4m  Bandar Raya posted net profit of RM28.4m in the 3Q2011 from a net loss of RM745,000 a year ago  due to better property development gross margins. Other positive factors were higher rental income  and gain from disposal of the gourmet delicatessen and foodhall business in the property division. Its  revenue rose 11.5% to RM142.3m from RM127.6m while EPS were 5.80sen compared with loss per  share of 0.20sen. In the 9M period, its earnings fell 52.8% to RM49.8m from RM105.6m in the  previous corresponding period while revenue was up just 2% to RM478.4m from RM468.8m.  (Financial Daily)

Mudajaya 3Q net profit jumps 76% to RM63m on-year  Mudajaya’s net profit jumped 76% to RM63m from RM46.5m, aided by a currency translation gain of  RM19.4m compared with loss of RM14.9m a year ago. Revenue increased at the same pace, up  76.4% to RM337.2m from RM191.2m while EPS were 2.5sen compared with 1.50sen. For the  9MFY2011, its earnings showed an increase of  8.7% to RM164.5m from the RM151.4m in the  previous corresponding period. Revenue rose 43.3% to Rm916.4m from RM639.1m. (Financial Daily)

Bank Negara foreign reserves up US$22m to US$135bn  Bank Negara Malaysia international reserves rose US$22m to US$135bn (RM429.7bn) as at Nov 15  from US$134.78bn as at Oct 31. The central bank said the reserves position was sufficient to finance  9.9 months of retained imports and is 4.1x the short-term external debt. (Financial Daily)

Time Engineering’s 3Q earnings RM89m, boost from asset disposal  Time Engineering posted net profit of RM89.7m in the 3Q2011, up 709% from RM11.1m a year ago,  boosted by a gain of RM91.9m from the disposal of investment. Revenue slipped 2.9% to RM15.4m  from RM15.9m mainly due to reduction in the group’s system integration business. EPS were  11.57sen compared with 1.43sen. The lower revenue in the current year was mainly due to the  completion of the MAMPU project and supply of ICT Equipment for MIS implementation in Vietnam.  (Financial Daily)

PPB Group 3Q earnings fall 20.3% to RM229m, Wilmar weighs  PPB Group’s earnings fell 20.3% to RM229.4m in the 3Q2011 from RM288.0m a year mainly due to  lower contribution from its associate, Wilmar International Ltd. The lower Wilmar contribution had  weighed its earnings despite the better performance by the grains trading, flour and feed milling  division. PPB’s revenue rose 23.6% to RM710.3m from RM574.5m while EPS were 19.35sen from  24.29sen. It said earnings in the 9MFY2011 fell 55.4% to RM710.2m from RM1.73bn despite that  revenue rose 18.5% to RM1.97bn from RM1.66bn. (Financial Daily)

MMC unit’s RM300m debt raising plan for airport  MMC Corporation’s unit Senai Airport Terminal Services Sdn Bhd (SATSSB) has undertaken a  RM300m Islamic medium term notes programme, with most of the funds to be used for the Senai  Airport in Johor. MMC said SATSSB had established the debt note programme which would have a  tenure of 13 years from the date of first issuance. The first issuance of the debt notes was expected  to be made by end November. The proceeds from the issuance of the IMTN programme will be  utilised to finance, among others, the expenditure  in relation to the development of Sultan Ismail  International Airport, Johor Bahru (Senai Airport) and several contiguous pieces of freehold land  situated at the southern fringe of the Senai Airport. (Financial Daily)

Government yet to decide on 6% service tax for pre-paid phones  The government has yet to decide whether or not to cancel the 6% service tax on prepaid telephone  users as has been announced by telco, the Dewan Rakyat was told yesterday. Deputy Information  Communication and Culture Minister Datuk Joseph Salang said the tax was one of the major revenue  earners for the country. (Bernama)

KLCCP, Qatari JV to build 2 towers next to Petronas Twin Towers  KLCC Property and Qatari Investment Authority will undertake to build two towers to be built next to  the Petronas Twin Towers. The two blocks -- an office tower and a hotel -- will sit on a four-storey  podium retail block which will be integrated with the present four-storey retail mall, said Suria KLCC  Sdn Bhd. The development will be completed by 2015 and is expected to attract more local and  international visitors to the mall. (Financial Daily)

MAS to cut unprofitable routes, focus on Asia  MAS, which posted a 3Q loss, expects 4Q earnings to be weaker and said it will cut unprofitable  routes and focus on higher-yielding destinations in Asia. With the adoption of a leaner network,  management shall also be accelerating the return of ageing aircraft, and in so doing improve the fuel  efficiency of our fleet, the carrier said. (Bloomberg)

Malaysia may see more affluent travellers  China, India and South Africa have emerged as the top tourism source markets for affluent travellers  considering visiting Malaysia in the next two years, according to the Visa Global Travel Intentions  Survey 2011. In a statement today, Visa Inc said  according to the survey, 30% of the travellers  would be from China, 26 % from India and 8% from South Africa. The survey also revealed that the  travellers are most likely to engage in outdoor activities, go on a food tour to sample local cuisines  and take part in water sports. (Bernama)

20111123 0959 Global Market Related News.

Asian Stocks Decline After U.S. Growth Slows, Australia Passes Mining Tax (Source: Bloomberg)
Asian stocks fell after Australia’s lower house of parliament passed a mining tax bill and a report showed slower-than-expected economic growth in the U.S. MSCI Asia Pacific Excluding Japan Index fell 0.2 percent to 387.89 as of 8:10 a.m. in Hong Kong.

U.S. Stocks Fall on GDP Revision (Source: Bloomberg)
U.S. stocks fell, driving the Standard & Poor’s 500 Index to its longest slump in almost four months, as slower-than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus. Alcoa Inc. (AA) and Bank of America Corp. (BAC) slid at least 2.1 percent to pace losses in the Dow Jones Industrial Average. The Dow Jones Transportation Average slumped 1.1 percent. Campbell Soup (CPB) Co. decreased 5.3 percent as the world’s largest soup maker’s sales trailed projections. Netflix Inc. (NFLX), the video- streaming and DVD subscription service, sank 5.4 percent after agreeing to sell $400 million in stock and convertible notes. The S&P 500 declined 0.4 percent to 1,188.04 at 4 p.m. New York time. The gauge lost 5.6 percent in five days. The Dow retreated 53.59 points, or 0.5 percent, to 11,493.72 today.

Stocks in U.S. Retreat as Growth Misses Forecast, Spanish Bond Yields Rise (Source: Bloomberg)
Stocks fell, dragging the Standard & Poor’s 500 Index to its longest slump in almost four months, as the U.S. economy grew less than estimated and Spain’s three- month borrowing costs more than doubled at an auction. Treasuries advanced and commodities climbed. The S&P 500 fell for a fifth day, losing 0.4 percent to close at 1,188.04 at 4 p.m. in New York after briefly turning higher amid signs the Federal Reserve was discussing more stimulus efforts. The Stoxx Europe 600 Index lost 0.7 percent. Spain’s two-year note yield surged to the highest since 1997, while Belgium’s 10-year yield reached a nine-year high. Ten-year Treasury yields slipped three basis point to 1.93 percent. The S&P GSCI Index of materials climbed 1 percent.
Gross domestic product climbed at a 2 percent annual rate from July through September, less than projected by economists and down from a 2.5 percent prior estimate, Commerce Department data showed. Spain sold three-month bills at a yield of 5.11 percent, more than double the 2.292 percent yield the last time the debt was offered on Oct. 25.

European Stocks Drop as Euro Area Borrowing Costs Rise; Commerzbank Slumps (Source: Bloomberg)
European stocks declined, extending their biggest drop in three weeks, as borrowing costs rose in the euro area, outweighing rating companies’ reaffirmation of America’s credit grades. Dexia SA led banks (SX7P) lower, slumping 8.1 percent, as Belgium’s bond yields rose to their highest level since 2008. Commerzbank AG slumped 15 percent on a report the lender may need more capital. Nokia Oyj (NOK1V) dropped 8.8 percent amid concern that the company has shipped fewer smartphones than estimated. British Land Co. (BLND) led a rally in real-estate companies. The benchmark Stoxx Europe 600 Index slipped 0.7 percent to 223.27 at the close as banks and technology companies retreated. The gauge earlier advanced as much as 1 percent after Standard & Poor’s and Moody’s Investors Service reaffirmed America’s credit grades.

Emerging Stocks at 35% Discount, Lures Goldman (Source: Bloomberg)
Emerging-market stocks are trading at levels 35 percent cheaper than their 15-year average as rising profits and falling interest rates from Brazil to Indonesia buoy investor confidence. While the MSCI Emerging Markets Index’s 9.7 percent gain from this year’s low on Oct. 4 lifted its price-earnings ratio to 10.3 from 9.7, the gauge is still trading below its mean since 1996, according to data compiled by Bloomberg. The measure jumped an average 35 percent after developing-nation policy makers began cutting interest rates in 2003, 2005 and 2008.
Investors pulled $26 billion from emerging-market mutual funds in the first nine months and the stock indexes sank about twice as much as advanced nations after Indonesia, Poland and Brazil raised interest rates. Now borrowing costs are coming down as policy makers seek to spur expansions at a time when export growth and inflation are slowing. The MSCI index may rise 30 percent in a year as record earnings outweigh Europe’s debt crisis, more than 17,000 forecasts compiled by Bloomberg show.

Fed Requires Top Banks to Submit Capital Plans (Source: Bloomberg)
The Federal Reserve told the 31 largest U.S. banks to test their loan portfolios and trading books against a deep recession and a European market shock to ensure they have enough capital to withstand losses. The most severe test scenarios outlined by the Fed today include an unemployment rate of as much as 13 percent, an 8 percent drop in gross domestic product and a 21 percent plunge in home prices. The tests may bolster confidence in the nation’s banks by demonstrating they can handle a deeper downturn after a year in which global financial markets were battered by the European debt crisis and U.S. unemployment remained stuck around 9 percent. The Fed helped clear away uncertainty surrounding bank capital adequacy in May 2009, when it published so-called stress tests showing that 10 U.S. banks needed to raise at total of $75 billion, giving investors more clarity on their capital needs.

FOMC Minutes Show Additional Easing Discussed (Source: Bloomberg)
Nov. 22 (Bloomberg) --Some Federal Reserve policy makers said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting. “A few members indicated that they believed the economic outlook might warrant additional policy accommodation,” the Fed said in minutes released today in Washington. “However, it was noted that any such accommodation would likely be more effective if it were provided in the context of a future communications initiative, and most of these members agreed that they could support retention of the current policy stance at this meeting.”

Dodd-Frank Law May Hinder Crisis Response by U.S. Policy Makers (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke and fellow U.S. policy makers may find themselves hampered in restoring financial stability should the European debt crisis spread to America. The Dodd-Frank legislation passed last year prohibits the Fed from engaging in rescues of individual financial firms, such as it did with Bear Stearns Cos. and American International Group Inc. (AIG) during the 2008 financial crisis. Lawmakers also banned the Treasury Department from again using an emergency reserve program to backstop money market funds. And the Federal Deposit Insurance Corp. now has to get Congressional approval before it can guarantee senior debt issued by banks. Investors “don’t realize the extent to which Congress has tied people’s hands,” said Donald Kohn, who served as vice chairman of the Fed from 2006 to 2010 and is now senior economic strategist for Potomac Research Group in Washington, an independent research firm. “There is less room to maneuver for the authorities.”

U.S. Is Set for Fourth-Quarter Growth Pickup on Lower Inventories: Economy (Source: Bloomberg)
The economy in the U.S. expanded less than previously estimated in the third quarter, reflecting a drop in inventories that points to a pickup in growth as 2011 comes to a close. Gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate, revised Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for no revision. Excluding stockpiles, so-called final sales climbed 3.6 percent, the most since last year’s fourth quarter. Gains in retail sales, manufacturing and housing this quarter, combined with lean inventories, raise the odds the world’s largest economy will pick up. At the same time, unemployment and stagnant wages mean consumer spending has been fueled by reductions in savings that cast doubt on whether increases will be sustained into 2012, just as the risks from government cutbacks and the European debt crisis intensify.

Supercommittee Failure Poses Risk to U.S. Economy Even as Rating Affirmed (Source: Bloomberg)
The implosion of the congressional supercommittee is likely to delay any major deficit-reduction agreement until after the next presidential election and may pose an immediate threat to the struggling U.S. economy. The committee’s failure to reach a deal means several tax programs, including a payroll tax holiday, risk expiring at the beginning of next year, weighing on the household spending that accounts for about 70 percent of the world’s largest economy. The panel’s inability to agree on $1.2 trillion in budget cuts stoked doubts about U.S. lawmakers’ ability to overcome partisan gridlock and deal with the nation’s fiscal future.

Payrolls Gained in 39 U.S. States in October, Led by Illinois, California (Source: Bloomberg)
Payrolls increased in 39 states in October, while the jobless rate dropped in 36, indicating the labor market is steadying across much of the U.S. Illinois led the nation with a 30,000 gain in jobs, followed by California with 25,700, figures from the Labor Department showed today in Washington. Virginia, Pennsylvania and Washington rounded out the top five states with the biggest gains. “Every region of the country seems to be in some stage of economic recovery,” said Steve Cochrane, director of regional economics at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The improvement in employment is fairly uniform. The factors holding back bigger increases are broad-based issues of business confidence, uncertainty about the U.S. deficit and difficulties in Europe.”

U.S.-South Korea Free-Trade Agreement Wins Approval of Assembly in Seoul (Source: Bloomberg)
A free-trade agreement between the U.S. and South Korea reached more than four years ago will take effect as early as Jan. 1 after lawmakers in Seoul approved the deal over objections from opposition legislators. The ruling Grand National Party used its majority in the assembly to ratify the deal today in Seoul, according to the parliament’s website. YTN Television broadcast images of opposition lawmakers shouting and said one shot tear gas in the room where the voting took place. President Barack Obama signed bills for the deal into law in the U.S. last month after Congress passed them. “This is a win-win agreement that will provide significant economic and strategic benefits to both countries,” U.S. Trade Representative Ron Kirk said today in a statement. “We look forward to working closely with the government of Korea to bring the agreement into force as soon as possible.”

IMF Revamps Credit Lines to Lure Nations (Source: Bloomberg)
The International Monetary Fund revamped its credit line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, as European leaders fail to end their debt turmoil. The Washington-based IMF said today the new instrument, the Precautionary and Liquidity Line, can be tapped by countries with strong economies currently facing short-term liquidity needs. Funding available will be capped at a percentage of countries’ contributions to the fund, limiting the role the instrument can play in preventing the debt crisis from spreading in Europe. “The size is too small to be meaningful for Italy and Spain,” said Edwin M. Truman, a former U.S. assistant Treasury secretary who’s now a senior fellow with the Peterson Institute, a private, nonprofit, nonpartisan research organization in Washington. The countries’ economic policies may also prevent them from pre-qualifying for the credit line, he said.

World Bank Sees Soft Landing for China as Asia Withstands Europe: Economy (Source: Bloomberg)
The World Bank said China is heading for a soft landing of growth in excess of 8 percent next year, and with most Asian nations has fiscal scope to cushion its economy from an escalation in Europe’s debt crisis. Developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea, Singapore and India, will see its expansion moderate to 7.8 percent in 2012 from 8.2 percent this year, the Washington-based development lender said in a semiannual report today. While China faces the risk of a “strong” impact from a real-estate correction, its gross domestic product will rise 8.4 percent next year and about that pace thereafter, the bank said. The report signals that Asia, which led the world out of the 2008-2009 recession, is poised to withstand the blows from any slump in demand for its exports or pull-back in credit by European banks.
The World Bank said countries with high investment rates, such as China, should focus on boosting consumer spending in any fiscal stimulus, such as with social security and pension provision.

U.K. Budget Deficit Narrows as Osborne Trims Government Spending: Economy (Source: Bloomberg)
Britain’s budget deficit narrowed in October as Chancellor of the Exchequer George Osborne slashed spending at government departments. Net borrowing excluding support for banks fell to 6.5 billion pounds ($10.2 billion) from 7.7 billion pounds a year earlier, the Office for National Statistics said in London today. The shortfall was in line with the median of 13 forecasts in a Bloomberg News survey. Outlays at government departments dropped 3.1 percent, limiting overall spending growth to 1.1 percent. Revenue rose 4.1 percent. Osborne and Prime Minister David Cameron have made all but eliminating a budget deficit of 9 percent of economic output by 2015 the centerpiece of their economic strategy, rebuffing opposition criticism that the cuts are hobbling growth. Only Greece, Ireland, Portugal and Iceland face a tighter fiscal squeeze among advanced economies, according to the International Monetary Fund.

Germany Sees No ‘Bazooka’ in Resolving Debt Crisis as Spanish Yields Surge (Source: Bloomberg)
Germany rejected calls from allies and investors to do more to counter market turmoil as Spain’s financing costs surged and pressure mounted on Greek political leaders to submit written commitments to austerity measures. Bond yields in France, Spain and Italy climbed as the absence of progress toward enacting a month-old comprehensive crisis-fighting package and a dispute over the central bank’s role rattled investors. Spanish three-month bills were auctioned today at higher yields than in Greece and Portugal. “We don’t have any new bazooka to pull out of the bag,” Michael Meister, finance spokesman for Chancellor Angela Merkel’s Christian Democratic bloc, said in Berlin today. “We see no alternative to the policy we are following,” which sees debt cuts and keeping the European Central Bank from becoming a lender of last resort, he said in an interview.

Euro-Region November Consumer Confidence Hits Two-Year Low on Job Concern (Source: Bloomberg)
European consumer confidence dropped to the lowest in more than two years in November, as the economy edged toward a recession and companies eliminated jobs. An index of household sentiment in the 17-nation euro area fell to minus 20.4 from minus 19.9 in October, the Brussels- based European Commission said in an initial estimate today. That’s the lowest since August 2009. Economists had forecast a drop to minus 21, the median of 28 estimates in a Bloomberg survey showed. Confidence has weakened for five straight months, the longest stretch of declines since 2008. European households are growing more pessimistic as governments from Spain to Italy toughen austerity measures, hurting a euro-area economy that already is cooling. BNP Paribas SA (BNP), France’s largest bank, said on Nov. 16 that it will eliminate 1,400 jobs to reduce costs. European Central Bank President Mario Draghi reiterated on Nov. 18 that “downside risks to the economic outlook” have increased.

Euro Trades Near Month Low Before Europe Manufacturing, Services Reports (Source: Bloomberg)
The euro traded 0.7 percent from a month low against the dollar before data forecast to show European manufacturing and services contracted amid the region’s sovereign-debt crisis. The 17-nation euro was 0.8 percent from a six-week low versus the yen ahead of reports that economists predict will show purchasing managers’ indexes for manufacturing in Germany and France, Europe’s two biggest economies, also fell this month. The dollar weakened against most of its major peers as lower-than-expected growth in the U.S. boosted speculation the Federal Reserve will embark on a third round of asset purchases, or quantitative easing. “The bias for the euro is that it falls,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “Overall the euro-zone economy is looking weak and trending weaker, and we’re expecting they’re going to recession sometime maybe next year.”

France’s AAA Status in Tatters as Yields Surge (Source: Bloomberg)
Investors aren’t waiting for Standard & Poor’s or Moody’s Investors Service to strip France, Europe’s second-biggest economy, of its top credit rating. The extra yield demanded to lend to AAA rated France for 10 years was 158 basis points more than the German rate at 11:51 a.m. today. The gap was 200 basis points on Nov. 17, the widest spread since 1990, up from 28 in April. The French 10-year yield was at 3.5 percent, about midway between top-rated Holland and Belgium, which is graded one level lower at Aa1 by Moody’s. French borrowing costs are more than a percentage point above the AAA rated U.K. “France isn’t trading like a AAA,” said Bill Blain, a strategist at Newedge Group in London, who recommends buying U.K. government debt. “The market has made its judgment already.”

Hungary May Have to Bow to IMF Conditions to Access Financial Assistance (Source: Bloomberg)
Hungary’s government may have to reverse its position on ruling out International Monetary Fund conditions in exchange for financial aid, according to Barclays Plc, Goldman Sachs Group Inc. and Capital Economics. Prime Minister Viktor Orban last week abandoned his policy of shunning the Washington-based lender, seeking help after a Standard & Poor’s threat to downgrade Hungary’s debt to junk sent the forint to a record low. He may have to do another reversal and scrap emergency taxes on some industries and ease the burden of a mortgage-repayment plan on banks, said Neil Shearing, an emerging-markets analyst at Capital Economics Ltd. The government has scrapped two debt sales and reduced the size of another eight auctions in the last three months as the euro region’s debt crisis deepened. The threat of market turmoil may force Orban to back down from insisting on an IMF agreement that won’t infringe on the country’s “economic sovereignty,” Barclays Capital economist Christian Keller said.

Australia’s Lower House Passes Gillard’s Mining Tax as Greens Support Bill (Source: Bloomberg)
Australia’s lower house of parliament passed legislation for a 30 percent tax on coal and iron-ore profits as independent lawmakers and the Greens Party backed Prime Minister Julia Gillard’s plan. The Minerals Resource Rent Tax Bill faces a vote next year in the upper-house Senate, where the Greens hold the balance of power, to become law. BHP Billiton Ltd. (BHP), Rio Tinto Group and other iron-ore and coal producers face paying about A$11 billion ($10.8 billion) in extra charges in the first three years of the tax. Australia’s iron ore shipments surged to a record A$6.3 billion in September as demand from China and India for raw materials helps power the Australian economy. “The benefits of the resources boom are one step closer to flowing to all Australians,” Treasurer Wayne Swan said in an e- mailed statement. The levy will “help us lock in the benefits of the boom” for all parts of the economy, he said.

Mexico Peso Strengthens From Seven-Week Low on Faster-Than-Forecast Growth (Source: Bloomberg)
Mexico’s peso rose from a seven-week low after a report showed Latin America’s second-biggest economy grew more than analysts forecast in the third quarter. The peso gained 0.3 percent to 13.9785 per U.S. dollar at the close in Mexico City, from 14.0165 yesterday, the weakest level since Oct. 3. The currency has declined 12 percent this year, the worst performance among the six most-traded Latin American currencies tracked by Bloomberg. The peso reversed earlier declines today and rose after the national statistics agency said Mexico’s gross domestic product expanded 4.5 percent in the third quarter from a year earlier, exceeding the 3.9 percent median estimate from 17 analysts surveyed by Bloomberg. The better-than-forecast Mexican GDP “gives a certainty and a stability” to the peso, Omar Martin del Campo, head trader at Banco Ve Por Mas SA in Mexico City, said by phone. “But we’re not bullet-proof from the international situation, what’s happening in Europe and in the U.S.”

CME Group Increases MF Global Customer Guarantee Payment to $550 Million (Source: Bloomberg)
CME Group Inc. (CME), the world’s largest futures exchange, increased the amount it’s willing to guarantee to the bankruptcy trustee of MF Global Holdings Ltd. to $550 million from $250 million. “CME Group’s proposal is designed to increase the payout percentage from 60 percent to 75 percent, and to accelerate the timing of that distribution to early December,” the Chicago- based company said today in an e-mailed statement. James Giddens, the trustee appointed to liquidate the company and distribute funds to customers, has said he could return 60 percent of client money as of today. CME Group also said it was “confident” that the trustee’s increased total of missing customer money was wrong. “While the final accounting of customer segregated assets and claims will occur in the bankruptcy process, CME Group is confident that reports of significantly larger shortfalls are incorrect,” the company said.

20111123 0958 Global Commodities Related News.

China Food Prices Down Last Week But Vegetables Up (Source: CME)
Key food prices, with the exception of vegetables, fell in China in the week to Sunday, the Ministry of Commerce said. Food items account for about a third of China's consumer price index, and price movement in the sector is closely watched as the government seeks to contain inflation. China's inflationary growth last month slowed for a third straight month, as the indicator was seen by analysts to have largely peaked. Still, wholesale prices of vegetables in the week to Sunday showed signs of resurgence, gaining 1.5% compared with a week earlier, and accelerating from a 0.4% gain the week before. This is the second straight week that vegetable prices have risen after a month of declines. Pork prices fell 1.7% and have come down 9.8% since mid-September. Mutton prices rose 0.8% while beef rose 0.5%. China may face a domestic pork supply deficit this year due to hog disease and rising feed costs, keeping upward pressure on prices, Rabobank agricultural analyst Chenjun Pan said earlier this month.
Egg prices slipped 0.9% during the eighth consecutive week of decline. Prices of edible oil were largely steady, the ministry said. The overall softening in prices suggest China may shift toward a more accommodative policy stance to support growth. The central bank said last week China will fine-tune its "prudent" monetary policy by an appropriate degree and at an appropriate time according to economic developments. The language of the statement represents a softening of official rhetoric on the task of containing inflation.

Corn (Source: CME)
US corn futures end slightly higher in a modest short-covering rebound. Markets stabilized generally after Monday's broad-based selloff on worries about the world economy. But traders say poor export demand is limiting corn's upside as cheaper global competition is winning more business. Investors are also unwilling to take on risk in the current environment. Meanwhile, farmers' reluctance to sell is limiting losses and traders wait to see when end users will step in to buy. December CBOT corn ends up 1 1/4c at $5.99/bushel.

Wheat (Source: CME)
US wheat futures end mostly lower on poor demand and technical selling. The market extended recent losses even as other markets stabilized, as anemic export demand continues to weigh on prices. Traders add that losses in the Minneapolis market, which has outperformed other markets, fell as the market hit pre-set sell signals. CBOT Dec. wheat ends up 2 1/2c to $5.94 a bushel, but all other contracts lower. KCBT Dec. wheat down 6c to $6.61 and Dec. MGEX wheat down 36 1/4, or 4%, to $8.60 1/4.

Rice (Source: CME)
US rice futures continue to tumble, ending lower amid poor demand. The market is at a 4 1/2-month low, and has fallen from a September high of $18.63 1/2. Weak exports and ample world supplies, along with technical selling, have weighed. Jan. CBOT rice ends down 14 1/2c to $14.31 per bushel.

U.S. wheat, corn edge up; economic worries weigh
KUALA LUMPUR, Nov 22 (Reuters) - U.S. corn and wheat prices recovered some ground  after a more than 1 percent drop in the previous session, but prices held below $6 a bushel as a grim global economic outlook weighed on sentiment.
"In the past two months, the market's tracking what's happening on the general economy," said Lynette Tan, an analyst at Phillip Futures in Singapore.

Weekend rain to help Argentine soy, corn -meteorlogist
BUENOS AIRES, Nov 21 (Reuters) - Weekend rain in Argentina's main crop belt further improved conditions for soy, corn and wheat, setting the stage for healthy harvests, a meteorologist said on Monday.
Farmers in grain-exporting powerhouse Argentina were concerned by dry weather in September, but precipitation over the last six weeks in top producing province Buenos Aires and surrounding areas improved the outlook.

Ukraine to boost spring grains area to cover losses
KIEV, Nov 21 (Reuters) - Ukraine plans to sow an additional 2.0 million hectares of spring grains and 300,000 hectares of soybean in 2012 in a bid to compensate future losses in winter grain crops already affected by poor weather, Ukraine's Farm Ministry said on Monday.
"Taking into account an expected area of the reseeding, the ministry and regions had worked out the structure of the 2012 spring sowing, according to which we plan to sow additional 500,000 hectares of maize, 200,000 of spring wheat, 300,000 of soybean, 1.2 million of spring barley and 100,000 of other cereals," the ministry said in a statement.

Bulgaria maize crop up 6 pct to 2.05 mln T
SOFIA, Nov 21 (Reuters) - Bulgaria harvested 2.05 million tonnes of maize this year from over 98 percent of the sown area, up 120,000 tonnes from a year ago mainly due to bigger acreage, the agriculture ministry said on Monday.
Farmers in the Balkan country planted 376,000 hectares with maize last autumn, up from 314,000 ha in 2009, the ministry said in a statement.

Options expiry to prop up corn, for now: Gavin Maguire
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Nov 21 (Reuters) - After having slumped by more than 10 percent in less than 10 days on the back of a broad commodity market sell-off, December corn futures prices look set to find their footing in the $6.00 area as a standoff develops in the options arena ahead of Friday's December options expiration.
Pools of open interest are still in place at the $6.00 a bushel strike price in both put and call options, which will likely keep the underlying futures market anchored in that area until those options go off the board on November 25. After that, however, fresh downside momentum can't be ruled out in corn prices should broad economic woes continue to spur widespread commodity selling.

Canada To Pass Wheat Board Changes By Year-End (Source: CME)
Canada's Agriculture Minister said the country's parliament would sit as long as required to get legislation passed before year-end that strips the Canadian Wheat Board of its monopoly powers as of next August. He told a grain-industry symposium in Ottawa that the Conservative government, with its majority mandate, would do what is required to ensure legislation passes - even if it means both the lower and upper houses of Canada's parliament continue to work through the planned Christmas break. Once a bill passes the upper house, or senate, it is enacted into law. The legislation, as structured, would allow wheat and barley farmers to sell their wares to whomever they choose, starting Aug. 1 of next year. More important, once the legislation gets through parliament farmers can enter into forward contracts for the sale of grain in the post-Aug. 1 period.
The lower house is scheduled to sit until Dec. 16 before taking a Christmas break. The upper house - whose members are appointed by the prime minister - are set to continue working until Dec. 22. The Conservatives have a majority of the seats in both chambers, but opposition parties have vowed to fight passage of the bill. The current policy requires grain farmers to sell their products to the Winnipeg-based agency. The government's proposed bill also establishes a new board of directors to take over the Canadian Wheat Board and restructure the organization, with the goal of selling assets to the private sector, in a five-year timeframe. Ritz added the lawsuit launched by eight Wheat Board directors to stop the federal government's efforts are baseless. "There is nothing in the legal challenges that is going to stop this," he said, adding that Canada's parliament is the country's supreme law-making body.

Zambia May Ban Wheat Imports To Protect Local Industry (Source: CME)
Zambia is considering a ban on wheat imports to protect the local industry from unfair competition, vice president Guy Scott said late Monday. He made the remarks while launching the 2011-12 planting season, when he urged farmers to diversify crop production. "The Patriotic Front government will strive to protect every farmer in the country, be it large or small scale" he said. "the government will pay particular attention to farmers as they are the genesis of the food production value chain." According to Zambia's Wheat Farmers Union, the country now produces enough wheat for the country's domestic market and can even export to regional southern African markets if the government can provide the sector with more incentives and ban cheap imports. Last week, Zambia's finance and planning minister announced a 48% increase in the agriculture funding for 2012.
President Michael Sata's Patriotic Front party, which won the presidential and parliamentary elections in September, has announced a range of policy legislations to deliver on populist campaign promises. The government is in talks with the Bakers Association of Zambia on measures to eliminate unnecessary costs in the wheat value chain and make the industry more competitive. Last month, Sata rejected a proposal from the bakers' body to increase the price of bread by 7%, saying it wasn't justifiable. Bread is a staple food for most urban residents in Africa's top copper producer. Last year, Zambia produced at least 220,000 metric tons of wheat, enough to meet local demand, but farmers now face competition from cheap imports.

US Wheat Ratings Stable, S Plains Still Stressed (Source: CME)
The condition of U.S. winter wheat crops held steady last week, although crops in the southern plains remain stressed by dryness issues. The U.S. Department of Agriculture, in a weekly crop progress report issued Monday, rated 50% of winter wheat as good to excellent, unchanged from a week earlier. The rating was up from 47% a year earlier. The good-to-excellent rating in Oklahoma rose 1 percentage point from last week to 55%. Dryness has plagued winter wheat this fall throughout the southern Plains. The crop will be harvested early next summer. There remain issues for southern plains wheat, and with forecasts for drier conditions this week and next, the ratings will probably drop further next week, said Rich Nelson, director of research at brokerage and advisory firm Allendale Inc. Plains states, such as Texas and Oklahoma, grow hard red winter wheat, used to make bread. Texas' good-to-excellent rating dropped one percentage point from last week to 22%.
Ratings were better in Midwestern soft red winter wheat states. Soft red winter wheat is used to make pastries and snack foods. In Ohio, the top soft red winter-wheat growing state, the good-to-excellent rating rose six percentage points from last week to 50%. In Indiana, the rating climbed 2 percentage points to 73%. The stability in the national rating was generally anticipated and shouldn't have a major impact on U.S. wheat futures, Nelson said. Traders aren't following the condition ratings closely enough to trade off of a one-percentage-point change at this point, he added. The yield of the crop is not determined by the fall crop rating. Indeed, good spring rains can still revitalize plants that missed out on autumn precipitation, analysts said. Overall, 87% of U.S. winter wheat had emerged from the ground as of Sunday, compared with the five-year average of 88% for this time of year, according to the USDA. A week ago, 83% of the crop had emerged.
In a weekly report issued Monday, USDA said the corn harvest was 96% complete as of Sunday, up 3 percentage points from last week and 8 percentage points above the five-year average for that point in the year. Corn harvest pace in Ohio picked up in the midst of drier conditions last week, rising eighteen percentage points to 69% complete, but still well off the five-year average of 88%. Despite Ohio continuing to lag behind in harvest, it should not be a problem as farmers will continue to advance the harvest in the next week, Nelson said.

Soybeans May Open Higher on China Demand; Corn, Wheat Futures Seen Steady (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Soybean futures may open 1 cent to 2 cents a bushel higher on the Chicago Board of Trade on speculation that demand will increase in China after prices dropped to a 13-month low, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. Soybean-oil futures are expected to open 0.15 cent to 0.25 cent a pound higher, and soybean-meal futures may open steady to $1 higher per 2,000 pounds.
-- Corn futures are called to open 1 cent a bushel lower to 1 cent higher in Chicago as domestic demand climbs and U.S. exports ebb, Gerlach said.
-- Wheat futures may open 1 cent a bushel lower to 1 cent higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange as a drop in the dollar boosts prospects for U.S. exports while rain in the southern Great Plains aids crop development, Gerlach said.

Corn May Advance on Speculation Price Declines Will Help Increase Demand (Source: Bloomberg)
Corn futures may gain on speculation that declining prices will increase demand for raw materials used to make food and biofuels. Wheat and soybeans may rise. Corn has dropped 3.6 percent this year, soybeans are down 18 percent and wheat has plunged 23 percent. China’s soybean imports may rise to 60 million metric tons this year, more than the 56.5 million forecast by the U.S. Department of Agriculture, Abah Ofon, an analyst at Standard Chartered Bank, said in a report. “Overall we still expect markets to trend higher in Q1-2012, although at a less aggressive pace than we saw at the start of the year, as they remain pinned down by uncertainty,” Ofon said. “We also believe investor demand will return, but this will depend very much on sentiment, which in turn hinges on developments in the euro area.”

ICE sugar, cocoa steady, digest recent losses
LONDON, Nov 22 (Reuters) - ICE raw sugar futures consolidated above the previous session's five-month low, as global markets steadied following a sell-off on worries over U.S. and European debt.
Raw sugar futures were slightly higher, caught between the smaller-than-expected Brazilian crop which is supportive of prices, and the large northern hemisphere crops which are bearish.  

Thai sugar cane crush starts after minor delays- trade
SINGAPORE, Nov 22 (Reuters) - Cane crushing has started in Thailand after minor delays caused by floods, with less than 10,000 tonnes of sweetener already produced before activity picks up next month in the world's second-largest exporter after Brazil, dealers said on Tuesday.
Thailand's worst floods in decades may cause minimal damage to sugarcane in the 2011/12 crop year, but market talk was that output could be revised down to 95 million tonnes from 100 million, though still within sight of last year's record of around 95.4 million tonnes.

Brazil sugarcane crop on way to another letdown
SAO PAULO, Nov 21 (Reuters) - Output from the world's biggest sugar producer Brazil is likely to disappoint again next season, putting a potential floor under global sugar prices that have been falling over the past few months.
Even with investments in cane replanting and good weather in the coming months, Brazil's main center-south sugarcane region will not recover to its high-water mark of 2010/11 when mills crushed a record 557 million tonnes.

Brazil 2011/12 coffee output seen down-attache
Nov 21 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"The ATO/Sao Paulo estimate for Brazilian coffee production during marketing year 2011/12 remains unchanged at 49.2 million 60-kg bags, down 5.3 million bags compared to the previous year, due to the off-year of the biennial production cycle of the Arabica trees. Coffee exports are estimated at 29 million bags, down 6 million compared to MY 2010/11, due to lower availability of the product. Carry-over stocks are forecast at 3.38 million bags."

Dry season takes hold in some Ivorian cocoa areas
ABIDJAN, Nov 21 (Reuters) - Ivory Coast's main cocoa growing regions were mostly dry last week, farmers said on Monday in what might augur an early start to the dry season in some parts in the world's top grower.
The dry and dusty season which brings the Harmattan winds usually runs from mid-November to March. When harsh, it can trim the size and affect the quality of the crop.

India again delays decision on sugar exports
NEW DELHI, Nov 21 (Reuters) - India again postponed a decision on sugar exports, raising the chance that approval for up to 1 million tonnes of sales could be delayed yet further as the government may face criticism of its food policies when parliament resumes on Tuesday.
Ministers with power to decide on exports now look likely to meet on Nov. 22, official sources said, after their talks were rescheduled twice in less than a week, most recently to Monday.

Brazil sugar output seen up in 2012/13-Kingsman
SAO PAULO, Nov 20 (Reuters) - Sugar output in centre-south Brazil is expected to rise to 32.5 million tonnes in 2012/13, some 2 million tonnes more than in 2011/12, Jonathan Kingsman, managing director of consultancy Kingsman SA, said on Sunday.
He told Reuters that he expected cane output in centre-south Brazil, the main growing region of the world's No. 1 sugar producer, to stand at 515 million tonnes in 2012/13.

Sugar Falls to Five-Month Low as India Permits More Exports; Cocoa Climbs (Source: Bloomberg)
Sugar futures fell to a five-month low after India, the world’s second-largest producer, approved an increase in exports. Cocoa rebounded from a 30-month low, while coffee was little changed. India will export an additional 1 million metric tons, boosting annual shipments to a four-year high. Raw-sugar prices have tumbled 35 percent from a 30-year high of 36.08 cents a pound on Feb. 2. “The news that India was allowing exports came earlier than the market was expecting,” Juliano Ferreira, a researcher at ICAP do Brasil CTVM, said in an e-mail. “Buying from China and Egypt had been supporting the market.” Raw sugar for March delivery dropped 2.7 percent to settle at 23.44 cents at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price touched 23.33 cents, the lowest for a most- active contract since June 8.

Oil Drops After Gasoline Stockpiles Rise, Growth Trails Estimate in U.S. (Source: Bloomberg)
Oil dropped from a three-day high in New York after rising gasoline stockpiles and slower-than- estimated economic growth raised concern about U.S. demand. Futures slipped as much as 0.5 percent after the American Petroleum Institute said fuel supplies climbed 5.42 million barrels last week. An Energy Department report today may show they rose by 1 million barrels, according to a Bloomberg News survey. U.S. gross domestic product advanced at a 2 percent annual rate, less than economists projected and down from a preliminary estimate of 2.5 percent, revised Commerce Department figures showed yesterday. Crude oil for January delivery slid as much as 48 cents to $97.53 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.70 at 10:42 a.m. Sydney time. The contract yesterday gained 1.1 percent to $98.01, the highest close since Nov. 17. Prices are up 20 percent from a year ago.

South Sudan says oil output down 20,000 bpd since July
JUBA, Nov 22 (Reuters) - South Sudan's daily oil output has fallen by about 5 percent since the country declared independence in July, largely because of logistics issues and a lack of skilled workers, the petroleum and mining minister said on Tuesday.
South Sudan took about 75 percent of the united Sudan's oil output with it when it broke off into a separate country.

POLL-U.S. crude stocks seen down on lower imports, higher runs
Nov 21 (Reuters) - U.S. crude oil inventories likely dropped last week for the third straight time, due to lower imports and slightly higher refinery runs, a preliminary Reuters poll of analysts showed on Monday.
On average, U.S. crude stockpiles were forecast down 0.5 million barrels for the week ended Nov. 18, according to the poll of five analysts. In the week to Nov. 11, crude stocks in the United States fell 1.06 million barrels to 337.03 million barrels, data from Energy Information Administration (EIA) showed.

Tin Producers in Indonesia to Review Export Ban as Contract Sales Persist (Source: Bloomberg)
Tin producers in Indonesia, the largest exporter, will meet tomorrow to review a decision to halt overseas shipments until the end of the year to boost prices, an industry group said. The review follows complaints from users about metal scarcity at a weekend meeting between the Indonesia Tin Association with at least 10 buyers from Germany, Japan, South Korea and Taiwan, Johan Murod, general secretary at the group, said by phone today. Tomorrow’s meeting will be held in Pangkalpinang, Bangka Belitung province, he said. “The buyers were complaining that the halt has caused difficulties in securing supplies,” Murod said from Pangkalpinang. “We will hear the aspirations of all our members, and see what can we do to address these complaints.”

20111123 0956 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures ended higher, able to stabilize after previous declines on recent export demand and the absence of external financial pressure. Soybeans were able to shake off the mixed signals from outside markets, buoyed by outlooks for strong demand at current price levels and seasonal buying, analysts say. Soybeans have a seasonal tendency to bounce after Thanksgiving as harvest concludes, and some traders are looking to take advantage of lower prices before any rally, say Tim Hannagan, analyst at PFG Best. CBOT Jan soy ended up 5c at $11.53/bushel.

Soybean Meal/Oil (Source: CME)
US soy product futures climbed, rebounding from prior declines in unison with soybeans. Oversold conditions and spillover support from higher crude oil futures added to soyoil's recover, with soymeal rising in step with the rest of the complex, analysts say. CBOT Dec soymeal ended up $2.40 at $292.00/short ton; Dec soyoil finished up 0.89c at 50.78c/lb.

Food Majors Buying More Sustainable Palm Oil (Source: CME)
Major food companies have increased purchases of sustainable palm oil since 2009, following their pledge to source only environment-friendly cooking oil, but figures show that the commitments aren't translating fast enough into increased usage, environmental group WWF said. Availability of certified sustainable palm oil has grown significantly since WWF's first scorecard in 2009, and now stands at 5 million metric tons annually, around 10% of global palm oil output. WWF said the scorecard assessed members and non-members of the Roundtable on Sustainable Palm Oil, and showed that 87 of 132 companies surveyed have committed to source 100% RSPO-certified palm oil by 2015 or earlier, a move that could spur planters to be certified sustainable oil producers. But sale of the environment-friendly oil is only half of current production. The scenario in 2011 "is not so different from the situation we observed in 2009," WWF said in the scorecard.
"It is clear that some manufacturers and retailers have fallen behind on their commitments to 100% sustainable palm oil, while others haven't even started at all," Adam Harrison, senior policy officer at WWF UK, said. "2015 is just around the corner. Companies need to move faster, only then can we ensure the momentum gained by the RSPO is not lost and avoid the negative impacts of irresponsible oil palm plantations on forests, wildlife and communities," said Harrison, who is also WWF's representative on the RSPO executive board. WWF issued the scorecard on the sidelines of RSPO's annual conference in Sabah, the northern region of the island of Borneo. WWF, along with several palm oil producers and consumer firms, helped set up the RSPO in 2004 to promote and develop environment-friendly practices for the palm oil industry following criticism that plantation firms were cutting down forests to cultivate the crop.
Companies that scored well include those dealing in very large volumes of palm oil, such as Nestle and Unilever, Ikea and United Biscuits. WWF also said there's a lack of transparency over the amount of palm oil that companies use. "Unless there is greater transparency, oil palm growers will remain unwilling to commit to certification," Harrison said. "If we want growers to act responsibly, buyers need to show what their future demand for certified sustainable palm oil is going to be," he said.

Palm drops to one-week low on debt woes, rains support
SINGAPORE, Nov 22 (Reuters) - Malaysian palm oil futures fell to their lowest in more than a week on concerns huge debt burdens in the U.S. and Europe may prove to be unmanageable and stall growth and commodity demand.
"Technically the market should do some correction today, after seeing the downward movement yesterday. The lower CBOT also played a part," said a trader with a foreign commodities brokerage in Kuala Lumpur.

Brazil soy planting surges under favorable weather
SAO PAULO, Nov 21 (Reuters) - The planting of Brazil's soybean crop is ahead of schedule after surging over the past week, as producers race to get their crops sown as early as possible this year, grain analysts Celeres said on Monday.
Ample rains since late September in most soy producing regions have allowed producers to sow an early crop this year, unlike last season when spring rains were delayed by a month and a half due to the effects of La Nina.

Palm Oil Declines for Second Day as Investors Seek Safer Assets
Nov. 22 (Bloomberg) -- Palm oil dropped for a second day as investors switched to safer assets amid deepening concerns that the debt problems in the U.S. and Europe may slow global economic growth, hurting demand for food and fuel. The February-delivery contract dropped as much as 1.4 percent to 3,145 ringgit ($990) a metric ton on the Malaysia Derivatives Exchange before trading at 3,182 ringgit at 4:15 p.m. in Kuala Lumpur. The U.S. deficit-cutting congressional supercommittee failed to reach an agreement, setting the stage for automatic cuts in 2013 and fueling concern that economic-stimulus measures that are set to expire will not be renewed. Germany’s Finance Ministry said the country’s expansion has gotten “noticeably slower,” while Moody’s Investors Service said France’s rising financing costs are increasing the nation’s fiscal challenges.    
Investors “are staying out until they can see more clearly,” Abah Ofon, an agricultural analyst at Standard Chartered Bank in Singapore, said by phone today. “There are a lot of risks out there.” As the yearend nears some investors are reducing their holdings of riskier assets including agricultural commodities such as palm oil to limit potential losses, Ofon said. Palm oil may resume its rally early next year as the market begins to focus on potential threats to production, including the impact of the La Nina weather pattern on yields, said Ofon, who forecasts prices may average 3,200 ringgit in the first quarter and 3,400 ringgit in the second quarter.