Thursday, December 29, 2011

20111229 1814 FCPO EOD Daily Chart Study.

FCPO closed : 3155, changed : -30 points, volume : lower.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : turned lower, buyer taking profit.
Support : 3150, 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded loss with lower volume participation. Overnight soy oil closed recorded marginal loss and currently trading lower while crude oil price rebounding little higher after overnight falls.
FCPO doing pullback correction due to profit taking activities after recent rallies ahead of New Year holiday.
Daily chart formed a down doji bar candle closed lower from upper Bollinger band level after market opened lower, edge upward slightly and swing downwards before last minutes lift to closed off the low of the day.
Technical study revised to suggesting a pullback correction little upside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20111229 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1510, changed : +5.5 points, volume : lower.
Bollinger band reading : little upside biased with possible pullback correction.
MACD Histrogram : rising, buyer taking exposure.
Support : 1505, 1500, 1494, 1485 level.
Resistance : 1515, 1530, 1540, 1550 level.
Comment :
FKLI closed recorded gain with relative low volume changed hand (due to holiday and change month) doing 3 points premium compare to cash market that closed slightly higher. Overnight U.S. market closed recorded loss and today Asia markets ended mixed while European markets also having mixed development.
Most market trading between gains and losses after news on record ECB balance sheet due to bank lending and ahead of New Year holiday.
Daily chart formed an up bar candle closed near upper Bollinger band level after market opened and traded lower followed by upward climbs before moved side ways range bound towards the end to closed near the high of the day.
Chart reading remained suggesting a little upside biased market development with possible pullback correction testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111229 1658 Regional Markets EOD Daily Chart Study.

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

20111229 1552 Global Market & Commodities Related News.

Asian stocks inch lower, euro extends drop
SINGAPORE, Dec 29 (Reuters) - Asian stocks fell, taking cues from weak U.S. and European shares, as players cut positions heading into the year end with an Italian debt auction later in the day keeping markets nervous.
"Everyone is holding onto their cash and people are not willing to invest in risk assets. With this kind of market sentiment, there's nowhere for the cash to go," said Hajime Nakajima, a sales trader at Cosmo Securities.

Corn, wheat snap 8-day rally; soy falls for 2nd day
SINGAPORE, Dec 29 (Reuters) - Chicago wheat slid 1 percent, while corn lost 0.8 percent as the grain markets snapped eight straight sessions of gains on risk aversion which weighed on equities and buoyed the U.S. dollar.
"Right now it seems like a bit of risk off environment as we are seeing that across the equity markets," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

La Nina dryness cuts Argentine corn forecasts
BUENOS AIRES, Dec 28 (Reuters) - Argentina's 2011/12 corn crop will be smaller than initial forecasts due to dry weather linked to La Nina, but production should still reach a record, analysts say.
The lowest estimates, figuring in losses caused by the La Nina climate phenomenon, remain higher than the record 23 million tonnes of corn harvested in the 2010/11 season.
Ivorian cocoa buyers seek end to grinders tax break
ABIDJAN, Dec 28 (Reuters) - Major buyers of Ivorian cocoa have urged the government of the world's top producing nation to cut a 20-year old tax break given to local grinders, arguing the incentive handed grinders an unfair market advantage.
Members of an international and local buyers association, which includes France-based commodities firm Sucden and leading cocoa trader Armajaro, said in a letter to Ivorian authorities  the tax benefit distorted the market.
Outlook still dry for south Brazil, Argentina soy
BRASILIA, Dec 28 (Reuters) - Brazil's southernmost soy state Rio Grande do Sul will have little rain in the next fortnight, forecaster Somar said on Wednesday, putting the newly sown crop there at greater peril of losses while Argentina's soy regions also remain dry.
Drought fears in South America have been a key driver behind a rise in Chicago soybean futures, which surged 3 percent to a six-week high on Tuesday. On Wednesday, January soybean futures  slid 7-3/4 cents to $11.92 a bushel by 9:33 a.m. CST (1533 GMT), hit by profit-taking.
Brazil's Bahia cocoa main crop now past peak
BRASILIA, Dec 28 - Warehouse deliveries in Brazil's top cocoa-producing state Bahia slowed in the week to Dec. 25 from the previous week, data from Bahia Commercial Association showed, marking the start of the harvest's declining phase.
"Arrivals from Bahia have started to diminish but still maintained a volume that is the highest for the Christmas week of the last 15 years," said Bahia-based cocoa analyst Thomas Hartmann.
Russian 2011 grain crop seen at 93.8 mln T - AgMin
MOSCOW, Dec 28 (Reuters) - Russian 2011 grain crop is preliminarily estimated at 93.8 million tonnes, up from 61 million tonnes in the drought-hit 2010, but down from 97 million in 2009, the Agriculture Ministry said on Wednesday.
This volume will allow Russia to cover all domestic needs and to export 25 million tonnes of grain in the 2011/12 crop year, the ministry said in a statement.

Vietnam's coffee supply squeeze to perk up global prices
SINGAPORE/HANOI, Dec 28 (Reuters) - Global coffee prices may surge early next year as tighter bank lending in top robusta producer Vietnam chokes off cash to exporters, cutting supply and pushing up premiums even as the harvest rolls in.
London robusta prices could rise by about 10-20 percent, leaving roasters with no choice but to pay up until farmers in Vietnam decide to release stocks and beans from other key coffee growers resurface in the second quarter of 2012.

Brent oil eases towards $107, dollar weighs
SINGAPORE, Dec 29 (Reuters) - Brent crude oil edged lower towards $107 a barrel, as a stronger dollar and rising U.S. crude stocks offset Iranian threats to halt a vital oil trade route.
"A big increase in U.S. crude oil stocks and the falling euro against the dollar are the main pressure points for the market at the moment," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo.

Vietnam 2011 crude oil output rises 1.1 pct y/y -govt
HANOI, Dec 29 (Reuters) - Vietnam produced an estimated 15.18 million tonnes, or 305,000 barrels per day (bpd), of crude oil this year, a rise of 1.1 percent from 2010, the government said on Thursday.
December's output reached an estimated 1.42 million tonnes, up 4.0 percent from the same month last year, the General Statistics Office said in its monthly report.

EU starts antidumping probe on some Chinese steel
LONDON, Dec 28 (Reuters) - The European Commission has opened an anti-dumping investigation on some Chinese organic coated steel products and imposed definitive antidumping duty on imports of Chinese stainless steel seamless pipes and tubes.
The EU body started the investigation after the European steel producers association, EUROFER, filed a complaint earlier this year alleging China was selling pre-painted sheet and plastic-coated sheet metal at extra low prices, threatening the domestic industry, it was reported in the Official Journal of the European Union last week.

Copper drops as firm dollar weighs; Italy bond sale eyed
KUALA LUMPUR, Dec 29 (Reuters) - London copper fell, dropping for a second straight session as a firm dollar weighed, while investors eyed an important Italian bond auction later in the day for further trading cues.
LME copper has dropped about 23 percent this year, coming after a 30 percent gain in 2010 and a 140 percent jump in 2009.

Gold wallows near 3-month low; Italy bond sale eyed
SINGAPORE, Dec 29 (Reuters) - Gold wallowed near a three-month low, remaining under pressure due to a firm dollar, while investors fretted over an important Italian bond auction later in the day.
"Gold is still up on the year and there are relatively few markets moving in the positive territory," said Nick Trevethan, Senior Commodity Strategist at ANZ. "People close their profitable positions to cash out before the year-end."

20111229 1101 Global Market & Commodities Related News.

GLOBAL MARKETS-Euro weakens broadly; S&P 500 erases 2011 gains
NEW YORK, Dec 28 (Reuters) - The euro weakened about 1 percent against the dollar and the yen on Wednesday, one day before an important auction of long-dated Italian debt, while U.S. stocks slid more than 1 percent on concerns about the economy in early 2012.
"If European banks are still this concerned, it's not a good sign," said Karl Schamotta, senior markets strategist with Western Union Business Solutions. "That underlines the possibility that this liquidity crunch is getting worse and will continue into the new year.

COMMODITIES-Oil snaps 6-day run-up; gold at 3-month low
NEW YORK, Dec 28 (Reuters) - Oil closed lower on Wednesday, snapping a six-day run-up,and gold prices fell too, hitting three-month lows, as a rally in the dollar pressured commodities denominated in the U.S. currency.
"The worry is that (European) banks are borrowing and then sitting on the money and not lending it, and that will limit growth just like it did in the United States," said Mark Waggoner, president at Excel Futures Inc, an oil and commodities broker in Bend, Oregon.

US crude stocks seen down on imports, seasonal draws
Dec 28 (Reuters) - U.S. crude oil inventories are expected to have fallen for the seventh consecutive period last week as refiners delayed imports to keep inventories low for year-end tax considerations, an expanded Reuters poll of analysts showed on Wednesday.
Averaging the views of nine analysts, crude stockpiles were expected to be down 1.7 million barrels, the preliminary survey showed.

US gasoline demand up over Christmas holiday
Dec 28 (Reuters) - U.S. retail gasoline demand rose sharply last week from the previous week as Americans hit the road for the Christmas holiday, but demand was down from the same week in 2010, MasterCard said in its weekly SpendingPulse report on Wednesday.  
Last week's gasoline demand rose 7.7 percent compared with the previous week, MasterCard said, but demand was 1.6 percent lower than it was a year ago.

Oil falls on dollar's rise, Wall St pullback
NEW YORK, Dec 28 (Reuters) - Oil prices fell on Wednesday, snapping a string of six straight sessions of gains as part of a broad sell-off across commodities and equities.  
"The complex wasted little time in offsetting yesterday's strong gains as the Tuesday injection of geopolitical risk premium was negated by today's broad based de-risking," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

NYMEX-Natural gas ends lower, Jan slips at expiration
NEW YORK, Dec 28 (Reuters) - U.S. natural gas futures ended lower on Wednesday, as concerns about record-high supplies outweighed the outlook for stronger demand due to colder Northeast and Midwest weather forecasts for next week.
"The colder forecast is a little supportive, but I think we just saw a little booksquaring today ahead of expiration and the end of the year," a Pennsylvania-based trader said, noting volume ahead of the New Year's holiday was very light.

Euro Coal-Market tracks oil during low activity
LONDON, Dec 28 (Reuters) - Physical prompt coal markets saw little activity in the first full day of trading after Christmas on Wednesday, and in the absence of spot trades to give price direction, coal was largely tracking the oil, as it has for the past few months.
There was little coal trading activity on Wednesday as many traders were bridging the Christmas and New Year holidays.

20111229 1059 Local & Global Economic Related News.

The Malaysia External Trade Development Corporation (Matrade) has  set a target to produce 200 new exporters through the Bumiputera Exporters  Development Programme (BEDP) and the Women Exporters Development  Programme (WEDP) by 2015. Matrade Deputy CEO Datuk Zakaria Kamarudin  said the focus was on small and medium scale entrepreneurs whose products  and services could be developed further and accepted by the market. It plans to increase bumiputra and women entrepreneurs’ contribution  to total exports to more than 20% by 2015.  Zakaria also said that Matrade was hopeful that the government, under  the Tenth Malaysia Plan, would increase the allocation for the  programmes to RM30m annually from RM5m presently so that it could  involve more participants. (Bernama, Starbiz)

The  Asean Economic Community (AEC) will continue to make headway  next year while economic integration will gather momentum in Asean which is  projected to see an economic growth of 5-6%.  International Trade and  Industry Minister Datuk Seri Mustapa Mohamed had said that Asean  was on track to realise the AEC by 2015. (Bernama)

The retail industry is expected to grow 6.5% this year (8.4% in 2010) and 6%  next year, the  Malaysia Retailers Association (MRA) said. For 4Q11,  retailers expect their sales to increase by 10.4%, with specialty retail stores  anticipated to record biggest sales growth at 15.9%.  This  is  followed by fashion and fashion accessories  (+14.9%),  department store-cum-supermarkets (+9.4%) and department stores at  modest (3.7%). Despite the optimism of these retailers, the association  itself estimates the retail sales to grow 5% in 4Q11 (7% in 3Q11). (BT)

Thailand’s industrial output fell the most in more than a decade in Nov due  to the floods. The manufacturing production index dropped 48.6% yoy (-30.1%  in Oct). The decline came in larger than market consensus for 38% drop.  (Bloomberg)

Thailand’s Finance ministry expects the economy will contract by 5% yoy in  4Q11 after flooding slashed production and reduced domestic demand, head of  the fiscal policy office, said. The Ministry of Finance expects the economy to  expand 1.1% in 2011. The ministry has downgraded its growth forecast twice  from earlier estimates of 2.6% and 1.7%- 2.0%. For 2012, the government  forecasts growth between 4.5% -5.5%. (Bloomberg)

The Bank of Thailand (BOT) will ask the government to clarify its proposal to  transfer public debts left over from the 1997 Asian financial crisis to the  central bank. Transferring the debt to the BOT, which already has negative  equity of THB400bn, could affect the bank's credibility, as its equity will be  negative THB1.5tr. (The Nation)  

Chinese Premier Wen Jiabao urged better protection for farmers’ rights to  ensure they receive a larger chunk of profits from the conversion of their land to  industrial and residential use. “We can no longer sacrifice farmers’ land  ownership rights to reduce urbanisation and industrialisation costs,” the official  Xinhua News Agency reported Wen as saying. “It’s both necessary and possible  for us to significantly increase farmers’ gains from the increase in land value.”  (Bloomberg)

China's government will run a smaller fiscal deficit in 2012 of Rmb0.8tr or  1.5% of GDP (from an estimated Rmb0.9tr in 2011), consisting of Rmb550bn by  the central government and Rmb150bn shared by local governments. Fiscal  outlays will increase 11% to Rmb11.1tr (US$1.75tr) in 2012, against a revenue  increase of 9%, according to figures which emerged at the conclusion of the  national Ministry of Finance Work Meeting. (Reuters)

China’s leading index was unchanged at 100.18 (100.17 in Oct). (Bloomberg)

China aims to change the  government’s role in the economy and reduce  microeconomic intervention, said Zhang Ping, chairman of the National  Development and Reform Commission. (Bloomberg)

China: Fiscal spending to rise at faster pace in 2012
Chinese Vice Premier Li Keqiang said central government spending will grow at a faster pace next year as officials seek to spur consumption in the world’s second- biggest economy. Fiscal policy will be targeted and “flexible,” Li told a meeting chaired by Finance Minister Xie Xuren. The government aims for an “appropriate” fiscal deficit and issuance of treasury bonds next year, Li said. (Bloomberg)

Philippine imports in Oct grew 2.3% yoy (+10.4% in Sep), as the  trade  deficit narrowed to US$932m (US$1,238m in Sep). Manila now expects  exports to fall 1% this year (5% in previous estimate), and imports to grow 7%  (13% in previous estimate). (Reuters)

The Philippines may increase its PP72bn  stimulus package approved in  Oct by a further PP20bn to boost growth, presidential spokesman Edwin  Lacierda said. (Bloomberg)

Vietnam’s export growth in the YTD eased to 33.3% yoy in Dec (34.7% in  Nov), while  imports increased 24.7% (26.4% in Nov). The  trade deficit widened to US$0.7bn (US$0.567bn in Nov). (Bloomberg)

Indonesia’s 4Q GDP may grow 6.5% or higher, said Finance Minister Agus  Martowardojo. (Bloomberg)

Indonesia’s finance ministry projected Dec CPI inflation to accelerate faster  than the 0.34% mom in Nov, due to food prices. Nevertheless the 2011 forecast  is expected to remain below 4%. (Xinhua)

Japan and India  renewed a  bilateral swap agreement that will make  available US$15bn to India to help it battle this year’s more-than-16% decline in  the rupee. The first such accord was signed in June 2008 to the tune of US$3bn,  and this recent one proffers Japan another avenue to use its US$1.2 tr of currency reserves, bolster its presence in international finance and foster a  closer trade relationship with Asia’s third-largest economy. (Bloomberg)

Japan’s industrial output fell 2.6% mom in Nov (a 2.2% gain in Oct) that  exceeded all forecasts in a Bloomberg survey. The biggest seasonally adjusted  monthly drops in industrial production were  in the information electronics  industry, with overall output contracting 23.7%. Passenger-car output lost  12.6%, whilst iron and steel production fell 1.2%. (Bloomberg)

Japanese consumer prices (excluding fresh food) fell 0.2% yoy in Nov (0.1%  decline in  Oct), the second straight monthly decline as energy cost increases  decelerated whilst prices of televisions and other durable goods continued their  losing streak. (The Mainichi Daily News)

Japan’s retail sales fell 2.3% yoy in Nov (a 1.9% gain in Oct), according to the  Ministry of Economy, Trade and Industry. Forecasts were for an increase of  0.1%. On a monthly basis, the gauge was down 2.1% in Nov after rising 1.4% in  Oct and falling 1.4% in Sep. (RTT News)

The European Central Bank’s balance sheet ballooned to a record 2.73 tr  euros (US$3.55tr) after it extended more credit to financial institutions last  week to maintain liquidity conditions in the economy during the debt crisis.  Lending to euro-area banks gained 214 bn euros to 879 bn euros in the week  ended 23 Dec. The balance sheet rise of 239 bn euros in the week makes it 553  bn euros higher than three months ago. (Bloomberg)

Indonesia’s Business Competition Supervisory Commission (KPPU) says the  state lost Rp240tr (US$26.16bn) in 2011 due to inflated contracts for goods  and services. The state allocated Rp800tr of its Rp1,435tr budget for goods  and services in 2011 that should have been procured through fair and  transparent tenders, commission chief Nawir Messi said, inflating prices by as  much as 30%. (Jakarta Post)

The Association of Indonesian Automotive Industries (Gaikindo) said that car  sales this year were likely to reach 880,000 units, exceeding an earlier target of  850,000.  The Indonesia Motorcycle Industry Association (AISI) forecast  motorcycle sales to reach 8.2m units in 2011, up 10% from last year. (Jakarta  Globe)

A record 7.6m tourists are expected to have visited  Indonesia by the end of  the year, up 0.6m from last year’s numbers but less than the government’s  optimistic target of 7.7m, the Ministry of Tourism and Culture has said. At  11M11, the number of tourists had reached 6.27m, up 8.47% yoy from 5.78m in  11M10. (Jakarta Globe)

Indonesia’s government agencies and departments have been in a  late-season rush to meet spending targets, data from the Ministry of Finance  showed. On 7 Dec, the government had spent 51% of the targeted Rp140.95tr  (US$15.5bn) set in the revised 2011 budget. But by 27 Dec, that had risen to  76.5%. In 20 days, the government accounted for 25.5% of its allotted annual  spending. (Jakarta Globe)

UK: Shop traffic falls on second sales day after Christmas
UK shopper numbers fell yesterday as discounting and mild weather failed to entice cost-conscious Britons to spend, according to market researcher Experian Footfall. Visits to shops and malls fell 0.7% on 27 Dec compared to the Tuesday after Christmas last year. Shopper numbers surged 21.5% on Boxing Day with extended hours helping boost business limited last year by Sunday trading restrictions. (Bloomberg)

EU: ECB balance sheet increases to record EUR2.73trn
The ECB’s balance sheet soared to a record EUR2.73tn after it lent financial institutions more money last week to keep credit flowing to the economy during the debt crisis. Lending to euro-area banks jumped EUR214bn to EUR879bn in the week ended 23 Dec. The balance sheet increased by EUR239bn in the week and was EUR553bn higher than three months ago. (Bloomberg)

US stocks hit as Italy’s debt sale spurs worry
The Dow Jones Industrial Average fell 139.94 pts, or 1.1%, to 12,151.41 with all of its 30 components ending in the red. US stocks suffered significant losses with the S&P 500 retreating to the loss column for 2011, on concern about Italy’s next auction of government debt. The Dow held a 5% gain for the year, with two sessions remaining. Back in negative terrain for 2011, the S&P 500 Index, shed 15.79 points, or 1.3% to 1,249.64, with natural-resource and energy shares hardest hit among its 10 major industry groups. The Nasdaq Composite declined 35.22 pts, or 1.3%, to 2,589.98, leaving the index in the red by 2.4% for the year. (Market Watch)

20111229 1055 Malaysia Corporate Related News.

Alam Maritim lands SHELL job
Oil and gas support services company Alam Maritim Resources Bhd has secured a RM29.8m job from Sarawak Shell to install offshore transport modules for the oil major. In a statement yesterday, Alam Maritim said the 9 month contract commenced in 4Q this year and is expected to complete by May 2012. The contract is not renewable, but is expected to positively boost earnings and net tangible assets for FY11 ending 31 Dec and beyond, it said. (Financial Daily ) Please see accompanying report.

Magna Prima to develop projects with RM1.6bn GDV
Magna Prima is set to develop high-end property projects with an estimated GDV of more than RM1.6bn in Jalan Ampang, KL and Jalan Gasing, Petaling Jaya. Magna Prima, an investment holding aims to develop comprising 2 towers, residential units and a hotel in Jalan Ampang as well as a mixed project in Jalan Gasing. “The Jalan Ampang project is expected to start next year and that for Jalan Gasing in 2013,” said Executive Director Datuk Rahadian Mahmud Mohd Khalil. (Financial Daily)

Box-Pak shares soar on talk of privatisation
Kian Joo Can Factory Bhd is planning to privatise subsidiary Box-Pak (Malaysia) Bhd under a multimillion ringgit deal that will involve certain Japanese firms, sources say. Kian Joo would pay RM3.20 a share for the remaining shares it does not own in its profitable corrugated carton boxes manufacturing unit, they said. Meanwhile, Box-Pak shares were the second top gainer on Bursa Malaysia yesterday. The stock soared 37 sen to close at RM2.47 with 2.81 million shares traded. YTD, Box-Pak has gained 107.56% or RM1.28, with a low of RM1.09 on 16 March this year. Kian Joo Can owns 32.91m shares, or a 54.83% stake, in Box-Pak. Another single largest shareholder is Amanah Saham Bumiputera Bhd with 5.16% stake. (BT)

The  Energy Commission expects the competitive bidding process for  4.5GW of power-generation capacity to involve a combination of new and  existing power plants. The new capacity will replace retired capacities that  expire in 2015-2016 and meet future demand in Peninsula Malaysia. An EC  official said that the process was still at the early stage of inviting prospective  bidders to register their interest and that the power regulator was  still working  out the details of the plan. (Star Biz)

The Energy Commission has moved to open up the bidding process for  the replacement of first generation Power Purchase Agreement (PPA). This was  revealed by Association of Water and Energy Research Malaysia (AWER)  President S. Piarapakaran in a statement. He did not elaborate.  While congratulating the Energy Commission for the move which he  described as bold, he called for a transparent and fair bidding process.  "Opening up the bidding up to 49% foreign equity will allow Malaysia to  have more industry players that can invest in better and efficient  technology," he said.  He also urged the Energy Commission to blacklist first generation  independent power producers that did not renegotiate their PPAs from  this bid. (Bernama)

MRT Corporation (MRT Corp) has achieved a significant milestone with the  signing of a Points of Agreement (POA) with the land owners in the  Jalan  Inai area which is affected by the MY Rapid Transit project.  The POA addressed issues such as the withdrawal of land acquisition,  access to the land for tunneling works, compensation and the judicial  review which some landowners have brought against the government.  The agreement will form the basis for the mutual agreements which is  expected to be signed between MRT Corp and the land owners end-Jan  2012, said MRT Corp in a statement Wednesday. The agreements are  expected to resolve all issues the land owners have with the MY Rapid  Transit project. (Bernama)

CIMB Group Holdings plans to introduce new Islamic products in Indonesia  and Singapore next year through its Islamic units in the two countries. The bank  is looking at introducing Islamic wealth management products and services as  well as basic consumer banking products such as deposits for the two countries.  (Starbiz)

Malayan Banking (Maybank) has made a subsequent issuance of RM1bn of  subordinated notes under its notes programme of up to RM3bn. Maybank said the subordinated notes issued comprised two trances – RM750m with tenure of  10 years on a 10 non-callable 5 basis (Tranche 1) and RM250m with tenure of 12  years on a 12 non-callable 7 basis (Tranche 2). It said the tranches were priced  at 3.97% and 4.12% respectively and had received strong support from investors,  resulting in an oversubscription of over 1.47 times for Tranche 1 and 1.48 times  for Tranche 2. (Starbiz)

EON Capital (ECB) paid its shareholders a final tax-exempt special dividend of  three sen per share. The final dividend is in addition to the previous first special  dividend and capital repayment paid out on  21  Jun and  23  Sept, 2011  respectively, amounting to a total of RM7.76 per share, ECB said. (Bernama)

Malaysia Airlines’ (MAS) unionized staff is unhappy over MAS’s  turnaround plan that will  downsize the airline’s workforce. MAS  Employees’ Union (Maseu) president Alias Aziz said that MAS management had  indicated its intention to reduce its workforce during a 16 Dec meeting but did  not say how many employees will be affected.  MAS will require existing employees to resign before they opt to join the  regional short haul airline. Maseu was told that only 3,000 staff was  needed for the airline’s short haul operations which included Firefly and  the yet to be named regional premium carrier. Currently, MAS has  20,000 staff.  Alias said that Maseu was not happy with MAS’s latest turnaround plan  and the union was concerned about the impact that cuts on unprofitable  routes, closing of overseas operations and spinning off subsidiaries  would have on MAS’s head count. Alias added, “The possibility of job cuts at MAS goes against what the  Prime Minister told me in a meeting in Sept 2011 that no job cuts or
voluntary separation schemes would result from the restructuring at  MAS”. (Sun Biz)

Boustead Holdings said that as at the close of acceptance and payment of its  restricted offer for sale at 5pm on Tuesday, the total acceptances and excess  applications received were 11.19m shares, representing about 73.86% of the  offer shares made available for subscription. Boustead is undertaking a series of  corporate exercises to cut its 97.81% stake in  Pharmaniaga  to 55%, in  compliance with Bursa Malaysia’s listing rules for listed companies to divest at  least 25% of its shares to the public. (Starbiz)

Boustead Holdings’ wholly-owned unit Boustead Building Materials has  completed the acquisition of 8.86m shares, representing a 70% stake, in  Boustead Sissons Paints from Boustead Holdings for RM10.5m. It has also  completed the acquisition of 3.8 million Boustead Sissons shares, representing a  30% stake, from  Lembaga Tabung Angkatan Tentera for RM4.5m.  (Starbiz)

PPB Group's flour-milling arm, FFM, has received regulatory go-ahead for one  of its three proposed 20%-stake acquisitions in  Wilmar International's  Chinese flour milling units totalling RM80.14m, paving the  way for greater  collaboration between the two companies controlled by Robert Kuok. (Financial  Daily)

Malaysian Rubber Board expects some RM275m will be invested under the  rubber National Key Economic Area (NKEA) mainly involving replanting  and new plantings of rubber trees nationwide, said director-general Datuk Dr  Salmiah Ahmad. In 2012, she said, active replanting activities would cover  about 38,000ha per year focusing mainly on Peninsular Malaysia while new  plantings would cover about 5,000ha each in Sarawak and Sabah. (Starbiz)

Property developer Mah Sing Group Bhd has taken legal action to restrain  Asie Sdn Bhd and  Usaha Nusantara Sdn Bhd from making deals  concerning a 4.08-acre leasehold parcel along Jalan Tun Razak, Kuala Lumpur.  (Starbiz)

Alam Maritim Resources Bhd has won a RM29.8m contract from  Sarawak Shell Bhd. It said its unit Alam Maritim (M) Sdn Bhd had received a  letter of award from Sarawak Shell for the E8 and F13K modules offshore  transportation and installation job. (Starbiz)

Huat Lai Resources Bhd is extending a mandatory takeover offer for egg and  poultry company TPC Plus Bhd at 30 sen cash, a mere 3.4% premium over  yesterday’s closing price. (Starbiz)

Three parties  - Faber Group Bhd's wholly-owned subsidiary  Faber  Mediserve Sdn Bhd, Pantai Medivest Sdn Bhd and Radicare (M) Sdn  Bhd which are vying for the hospital support services (HSS) concessions by the Government are likely to get their contracts renewed within the next  month, according to sources close to the matter. (Starbiz)

Bursa Malaysia has given Uzma Bhd an extension of six months until July 6  2012 to implement its private placement. Uzma had in May applied for the  listing of and quotation of up to 8m new ordinary shares of 50 sen each. (BT)

Star Cruise has earmarked RM79.2m (US$25m) to refurbish SuperStar Virgo  which will further strengthened its cruise holiday products for regional and  international passengers. Chief executive officer William Ng said in a statement  the investment underpinned the company’s continuous drive to grow Asia’s  cruise industry. (Bernama)

Financially distressed technology company Tricubes Bhd said there were typo  errors in its 2011 annual report which showed accumulated losses of RM7.3m  when in actual fact the figure was RM17.24m. (Starbiz)

Zecon Bhd's earnings are expected to increase with the imposition of new toll  rates on the privatised Tun Salahuddin Bridge across the Sarawak River here  beginning next year. From Jan 1, toll rates would be increased by between 7%  and 10% for various classes of motor vehicles. The new rate for cars/taxis is  RM1.60, up 10 sen, RM2.20 for pick-ups/vans and RM3.30 for buses/lorries, an  increase of 20 sen and 30 sen respectively. Motorcyclists will continue to pay 50  sen. Toll card users with a reload value of RM100 and above would continue to  have the RM15 free add-on value. (Starbiz)

Lion Corp: Gets lenders’ nod to defer payments totaling RM341m Lion Corp has secured its lenders’ approval to defer the repayment totaling RM341.10m by  one more year from Dec 31, 2011 to Dec 2012. The amounts deferred included the  redemption of the outstanding nominal value of the Class B(a) bonds and Class B(b) bonds  amounting to RM196.32m. Also deferred was the repayment of the outstanding nominal  value of the Class B debts of US$350,000 (RM1.11m). The lenders also deferred the payment  of the principal and coupon on the Class B(a) redeemable convertible secured loan stocks  (RCSLS), Class B(b) RCSLS and Class B(c) RCSLS amounting to RM143.68m. (Financial Daily)

Goldis: Trigoh buys out Macro Kiosk for RM15m The founders of Macro Kiosk, a multi-country mobile technology enabler, have initiated a  management buy-out of the latter from Goldis Bhd. Macro Kiosk said the MBO by Malaysian  brothers, Kenny Goh, Henry Goh and Goh Chee Seng will be carried out via their corporate  vehicle, Trigoh Sdn Bhd.  They are the  CEO,  COO and Head of Corporate Affairs of Macro  Kiosk, respectively. The MBO encompasses the purchase of the 70% stake in Macro Kiosk  currently held by Goldis for RM15m cash. The MBO will result in an estimated gain of about  RM9.5m derived from the buyout proceeds at the Goldis' Group level. (Business Times)  

20111229 1023 Renewable Energy Related News.

PARIS, Dec 26 (Reuters) - A new consortium, including Swedish energy firm Vattenfall  and France's train operator SNCF, has emerged to bid for hydropower concessions that the French government is due to put for auction, French newspaper Les Echos reported on Monday.
Citing no sources, Les Echos said steel major ArcelorMittal  and specialty chemicals maker Rhodia, which is now controlled by Belgian chemicals group Solvay , were also part of the consortium that will be unveiled in January.

WASHINGTON, Dec 23 (Reuters) - The U.S. Commerce Department is giving itself an extra month to investigate charges of unfair Chinese government subsidies in a case brought by the U.S. unit of German solar energy company SolarWorld , a department official said on Friday.
The official, speaking on condition of anonymity, said the department will issue its preliminary decision on countervailing duties on Feb. 14, instead of around Jan. 12 as originally scheduled.

LONDON, Dec 22 (Reuters) - Britons who wish to install solar panels this Christmas are left wondering about how much money they will receive in state subsidies after the High Court on Wednesday decided the government had acted unlawfully in its rate-setting process.
The government proposed at the end of October to halve so-called feed-in tariffs (FITs) for solar plants for projects below 4 kilowatts (kW) installed after Dec. 12, but the legal consultation process on the proposals will not finish until Dec. 23.

TOKYO, Dec 22 (Reuters) - Six regionally dominant electricity utilities in central and western Japan have agreed to coordinate the use of their grid to boost wind power capacity in the area by a total 400 megawatts from about 1,230 MW over the next four to five years.
Shikoku Electric Power Co  and Hokuriku Electric Power Co , both of which have a high potential for wind power, plan to start accepting applications from operators of wind turbines in the coming months, the six companies said in a statement on Thursday.

HONG KONG, Dec 22 (Reuters) - Huge overcapacity and weak demand mean Chinese wind turbine makers, among the world's largest, are set for lower revenue and profits for at least the next two years.
China had more than 80 wind turbine makers as of 2010, capable of producing over 40 Gigawatts, yet wind equipment demand is expected to be just 15 GW a year.

LONDON, Dec 21 (Reuters) - British government plans to cut subsidies for solar panels on homes were ruled legally flawed by the High Court on Wednesday.
The decision was a victory for environmental campaigner Friends of the Earth and two solar companies, Solar Century and HomeSun, who said the plans were creating economic uncertainty.

LONDON, Dec 21 (Reuters) - British oil major BP  shut down the remnants of its solar unit on Wednesday, drawing a line under the business on which most of its Beyond Petroleum tagline of the early 2000s was premised.
The unit, which BP has been scaling back since 2008, is the latest sun energy business to fall victim to rampant competition from China, falling prices, overcapacity and lower government subsidies on which the industry still depends.
FRANKFURT, Dec 21 (Reuters) - Robert Bosch, the world's top automotive supplier, will enter one of the last profitable niches of the solar industry by acquiring the inverter business of Conergy , a sign that competition in the sector is getting tougher.
Bosch has been gradually working its way through the solar value chain via takeovers, buying solar cell maker Ersol for more than 1 billion euros ($1.3 billion) in 2008 and panel maker Aleo Solar  a year later.

20111229 1022 Biofuel Related News.

BUENOS AIRES, Dec 27 (Reuters) - Argentine biodiesel exports rose more than 58 percent to $1.9 billion in 2011 compared with the year before, the country's main biodiesel industry group said on Tuesday.
In volume terms, biodiesel exports from the South American country shot 18.5 percent higher to 1.6 million tonnes, according to a statement from the Argentine Biofuels Chamber, or CARBIO, as it is known by its Spanish initials.

Dec 26 (Reuters) - Brazil's government will lend up to 500 million reais ($268.64 million) per year for ethanol makers to stock the biofuel, a measure aimed at securing adequate supplies in the interharvest, according to a decree published on Monday.
The measure, which had been announced in April but was not yet put into force, guarantees mills will have an annual loan available for storage over the next five years and sets the official sources for the credit.

COPENHAGEN, Dec 22 (Reuters) - Novozymes , the world's leading industrial enzyme producer, sees a new enzyme product for the biofuel industry helping boost revenue growth in 2012, as consumers look for alternatives to fossil fuels.
Bioethanol, which can be blended with gasoline to run cars, is seen as a growth market though development has been held back by uncertainties over U.S. regulations to support green energy.

MILAN, Dec 22 (Reuters) - Italy's oil and gas major Eni  and Angola's national oil company Sonangol have signed an agreement to develop joint mining initiatives in Angola and abroad and other deals, Eni said on Thursday, as the group aims to boost its presence in the African country,
The two companies have also signed agreements to carry out a pilot project in food and biodiesel and non-associated gas development projects related to block 15/06 in Angola, Eni said in a statement.

WASHINGTON, Dec 21 (Reuters) - A U.S. ethanol tax credit costing roughly $6 billion a year will expire on Dec. 31, with the U.S. industry declaring itself ready to stand on its own and Brazil hoping for a biofuels bonanza in the years ahead.
Thanks to the high cost of crude oil, corn-based ethanol is attractively priced. Output and exports are record-high this year and a U.S. law assures renewable fuels a share of the U.S. motor fuel market.

20111229 1022 Global Market Related News.

Asia Stocks Drop Third Day on ECB Lending (Source: Bloomberg)
Asian stocks (MXAP) dropped for a third day, with the regional benchmark index heading to the first annual drop since 2008, after a surge in the European Central Bank’s balance sheet highlighted risks of the debt crisis and economic slowdown. Sony Corp. (6758), a consumer-electronics maker that relies on Europe for a 21 percent of its sales, slid 1.3 percent after the euro dropped to a 10-year low against the yen, diminishing the earnings outlook for Asian exporters. Lynas Corp., an Australian rare-earth explorer, slid 7.1 percent on reduced earnings prospects from China. OZ Minerals Ltd. (OZL), an Australian mining firm, fell 5.4 percent after metal prices slid and a train carrying copper concentrate derailed. The MSCI Asia Pacific Index fell 0.7 percent to 111.96 as of 10:28 a.m. in Tokyo with all but one of the gauge’s 10 industry groups falling. For the month, the index is heading for a 1.2 percent decline. The measure has dropped 19 percent this year, the most since 2008.

Japan Stocks Fall as Yen Reaches 10-Year High Against Euro on Debt Concern (Source: Bloomberg)
Japanese stocks fell for a third day as the yen rose to a 10-year high against the euro after a surge in the European Central Bank’s balance sheet to a record highlighted the growing risks of the debt crisis, clouding the earnings outlook for exporters. Sony Corp., a consumer-electronics maker that relies on Europe for a 21 percent of its sales, fell 1.4 percent. Sharp Corp. extended its decline as it and other makers of liquid- crystal display panels agreed to pay $538.6 million to settle antitrust claims. Elpida Memory Inc. sank 4.9 percent after the Asahi newspaper reported the chip maker may seek to delay debt payments. The Nikkei 225 Stock Average (NKY) fell 0.9 percent to 8,347.24 as of 9:50 a.m. in Tokyo. The broader Topix lost 0.5 percent to 718.21, with more than twice as many shares declining as advancing.

European Stocks Retreat After Italian Bill Sale; Carmakers, Banks Decline (Source: Bloomberg)
European stocks fell, snapping a three-day rally, as declines in carmakers and mining companies outweighed optimism that an easing in Italy’s borrowing costs indicated the region’s debt crisis won’t deepen. Bayerische Motoren Werke AG (BMW), the world’s biggest maker of luxury cars, lost 3.3 percent. Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s biggest lenders, slid at least 3 percent. Tesco Plc (TSCO), the U.K.’s largest supermarket chain, jumped 2.3 percent. The Stoxx Europe 600 Index dropped 0.7 percent to 240.20 at the close in London. The gauge rallied 2 percent in the previous three sessions as investors turned attention from the debt crisis to U.S. data that showed the recovery in the world’s largest economy is gathering pace. Stocks erased gains after a report said the European (SXXP) Central Bank’s balance sheet soared to a record after it lent financial institutions more money last week in an attempt to keep credit flowing to the economy during the debt crisis.

Euro, Stocks Retreat as ECB’s Balance Sheet Expands to Record Amid Crisis (Source: Bloomberg)
The euro slid to a 10-year low versus the yen and stocks fell, halting a five-day rally in the Standard & Poor’s 500 Index, as Italian bonds erased earlier gains and a surge in the European Central Bank’s balance sheet to a record highlighted risks from the region’s debt crisis. The euro lost as much as 1.1 percent to 100.73 yen and decreased 1 percent to an 11-month low of $1.2937. The S&P 500 dropped 1.3 percent to 1,249.64 at 4 p.m. in New York and the Dow Jones Industrial Average lost 139.94 points, or 1.1 percent, to 12,151.41. Ten-year Italian bond yields rose less than one basis point to 6.999 percent after losing as much as 25 basis points. Oil snapped a six-day advance and gold capped the longest slump in two years. U.S. Treasuries rallied.
The ECB’s balance sheet soared to a record 2.73 trillion euros ($3.55 trillion) after it lent financial institutions more money last week in an attempt to keep credit flowing to the economy during the debt crisis. Early gains in stocks and U.S. index futures came after Italy’s borrowing costs plunged at an auction of 9 billion euros of six-month bills, while investors turned their attention to the nation’s auction of longer-term bonds tomorrow.

S&P 500 Snaps Five-Day Advance Amid Concern About Europe’s Debt Crisis (Source: Bloomberg)
U.S. stocks declined, halting a five-day advance in the Standard & Poor’s 500 Index, as the European Central Bank’s balance sheet increased to a record after a surge of bank lending to stem the region’s debt crisis. Alcoa Inc. (AA) and Chevron Corp. (CVX) dropped at least 1.8 percent as the euro tumbled to the lowest level since January against the U.S. dollar, curbing demand for commodities. The Morgan Stanley (MS) Cyclical Index sank 1.9 percent as Caterpillar (CAT) Inc. and Ford Motor Co. (F) slid more than 2.3 percent. Bank of America Corp. (BAC) slumped 3.6 percent, extending yesterday’s decline.
The S&P 500 retreated 1.3 percent to 1,249.64 at 4 p.m. New York time. The benchmark gauge erased its 2011 gain and fell below its average price of the past 200 days. (SPX) The Dow Jones Industrial Average slid 139.94 points, or 1.1 percent, to 12,151.41 today. The Russell 2000 Index of small companies dropped 2.1 percent. About 4.4 billion shares changed hands on U.S. exchanges, or 42 percent below the three-month average.

BRIC Decade Ends With Record Stock Outflows as Goldman Says Growth Peaked (Source: Bloomberg)
In the past decade, mutual funds poured almost $70 billion into Brazil, Russia, India and China, stocks more than quadrupled gains in the Standard & Poor’s 500 Index and the economies grew four times faster than America’s. Now Goldman Sachs Group Inc. (GS), which coined the term BRIC, says the best is over for the largest emerging markets. BRIC funds recorded $15 billion of outflows this year as the MSCI BRIC Index sank 24 percent, EPFR Global data show. The gauge, which beat the S&P 500 by 390 percentage points from November 2001 through September 2010, has trailed the measure for five straight quarters, the longest stretch since Goldman Sachs forecast the countries would join the U.S. and Japan as the top economies by 2050.
“In emerging markets, we’re waiting for things to get worse before they get better,” said Michael Shaoul, the chairman of Marketfield Asset Management in New York who predicted in February that developing-nation stocks would fall this year. The $845 million Marketfield Fund (VONEMBI) has topped 97 percent of peers in 2011, data compiled by Bloomberg show.

Bernanke’s Drive for Openness May Include More Briefings by Fed: Economy (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke could double press briefings to improve understanding of policy changes that may include signaling interest rates will stay near zero longer, economists said. Adding briefings “is a viable option because Bernanke has been an effective communicator” of policy aims, said Sam Bullard, senior economist at Wells Fargo Securities. Fed officials may also replace their pledge to keep the benchmark rate close to zero through mid-2013 with a description of circumstances under which rates would rise, said Keith Hembre, chief economist at Nuveen Asset Management in Minneapolis. Boosting the frequency of press conferences would give Bernanke more opportunities to explain shifts in policy and the Fed’s outlook for the economy. The Standard & Poor’s 500 Index fell 6 percent over two days following the Fed’s statement in September that the economy faced “significant downside risks,” an assessment that wasn’t followed by a more detailed explanation.

Minimum Wage in U.S. Fails to Beat Inflation: Chart of the Day (Source: Bloomberg)
Workers in the U.S. earning the minimum wage are worse off now than they were four decades ago. The CHART OF THE DAY shows that after adjusting for inflation, the federal minimum wage dropped 20 percent from 1967 to 2010, even as the nominal figure climbed to $7.25 an hour from $1.40, a 418 percent gain. The decline would have been worse if not for increases that took place from 2008 through 2010 in how much employers were legally obligated to pay. Combined with more stable consumer prices, those adjustments helped trim the reduction in earnings from 41 percent at the end of 2007, following a decade of no change in minimum pay.

Treasuries Hold Gains Before Home Sales Data, as European Concern Grows (Source: Bloomberg)
Treasuries held yesterday’s biggest gain in seven weeks before an industry report that economists forecast will show U.S. pending home sales grew at a slower pace last month. Benchmark 10-year yields were about a quarter percentage point away from the record low as Italy prepared to sell as much as 8.5 billion euros ($11 billion) of notes today. Treasuries have returned 9.6 percent this year, according to Bank of America Merrill Lynch data, as the European debt crisis led investors to seek the relative safety of U.S. securities. It is the biggest gain since 2008. “U.S. Treasuries are a good place to be,” said Hideo Shimomura, who helps oversee the equivalent of $77 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest bank. “We are focused on the most liquid markets.”

China-Japan Currency Deal Points Way to a New World Monetary Order: View (Source: Bloomberg)
The agreement announced between China and Japan to strengthen financial ties and promote yuan-yen trade is a small, but notable, step toward a new global economy. Its immediate practical significance is limited, yet the deal signals that a deeper transformation is under way -- and one that the world should welcome. The plan was a surprise: It marks a warming of relations that had been chilly of late. The accord still lacks a timetable for implementation, but once in force it will let Chinese and Japanese trading companies switch between yuan and yen without converting to dollars first. This will encourage commerce by reducing currency risk and trading costs.
The agreement will let a Japanese-backed institution sell yuan bonds in China, helping to open China’s capital market. In return, Japan will convert some of its foreign- exchange reserves into Chinese bonds. China has signed financial pacts with other nations, mainly in Asia, but the size of China-Japan trade -- $340 billion last year, and growing fast -- makes this deal the most important by far.

China’s EXIM Lend More to Sub-Sahara Africa Than World Bank, Fitch Says (Source: Bloomberg)
Export-Import Bank of China extended $12.5 billion more in loans to sub-Saharan Africa in the past decade than the World Bank, Fitch Ratings said. State-owned EXIM lent about $67.2 billion to the world’s poorest region between 2001 and 2010 compared with the World Bank’s $54.7 billion, the ratings company said in a report e- mailed from London today. “It is estimated that 20 percent of EXIM bank’s total business volume is conducted with Africa,” Fitch said. “Angola, Ethiopia, Nigeria and Sudan have been traditional recipients of EXIM loans since the bank’s founding in 1994. However, more recent projects suggest an even distribution across the African continent.”

Ma Stakes Re-Election on China Rapprochement Strengthening Taiwan Economy (Source: Bloomberg)
Taiwan President Ma Ying-jeou said his rapprochement with China will encourage other nations to strengthen trade with the island and make it less dependent on the mainland, rebutting opposition criticism that he’s left the economy more vulnerable. “Taiwan has transformed its role from a troublemaker to a peacemaker,” Ma, vying for a second four-year term in Jan. 14 elections, said in an interview in his Taipei office. “We’re seeing more windows and doors being opened for Taiwan because of improved cross-strait relations. They have lowered their concerns in developing relations with us, the logic being: If Beijing can develop better relations with Taiwan, why can’t we?”
Ma’s lead with voters has narrowed as slower growth in the export-reliant economy deepens concern over a wealth gap the opposition blames in part on Taiwanese jobs going to the mainland. Victory at the polls may turn on how close Taiwanese want China ties to be, said Alexander Huang, a professor of strategy and war-gaming at Tamkang University’s Graduate Institute of International Affairs.

Kim Jong Un May Open North Korea: Defector (Source: Bloomberg)
Kim Jong Un may relax state controls over North Korea’s economy and ease the isolation entrenched by his late father’s nuclear weapons program, according to a banker who fled the communist state after years working for the regime. Kim’s Swiss education and his reported fondness for basketball -- a sign he’s a team player -- may make him more open to change than his late father, Choi Se Woong, former deputy governor of the North’s Korea Reunification Development Bank, said in an interview in Seoul this week. “It’s better for North Korea to have Kim Jong Un as their leader than anyone else,” said Choi, 50, who defected to the South in 1995 and is the son of a former North Korean finance minister. “Kim Jong Un will seek to start a market economy but it will be uniquely North Korean-style, different from China, South Korea or any other capitalist country.”

ECB Balance Sheet Increases to a Record $3.55 Trillion on Loans to Banks (Source: Bloomberg)
The European Central Bank’s balance sheet soared to a record 2.73 trillion euros ($3.55 trillion) after it lent financial institutions more money last week to keep credit flowing to the economy during the debt crisis. Lending to euro-area banks jumped 214 billion euros to 879 billion euros in the week ended Dec. 23, the Frankfurt-based ECB said in a statement today. The balance sheet increased by 239 billion euros in the week and was 553 billion euros higher than three months ago. The euro weakened and stocks fell, halting a five-day advance in the Standard & Poor’s 500 Index, as the announcement highlighted risks from Europe’s debt crisis. “The market reaction is slightly incomprehensible,” said Jens Kramer, an economist NordLB in Hanover. “After that record liquidity injection it would follow that the balance sheet would swell. Seeing the figure in black and white, and the fear of what would happen to the ECB if a country defaulted, may have spooked the market.”

Swiss Leading Indicator at Two-Year Low Signals Deeper Slowdown: Economy (Source: Bloomberg)
Switzerland’s forward-looking economic indicator fell to the lowest in more than two years in December, adding to signs of a deepening slowdown. The monthly gauge, which aims to predict the economy’s direction about six months ahead, dropped to 0.01 from a revised 0.34 in November, the KOF Swiss Economic Institute in Zurich said in an e-mailed statement today. That’s the lowest reading since August 2009. Economists forecast a decline to 0.23, according to the median of 12 estimates in a Bloomberg News survey. Switzerland’s export-led economy is floundering as Europe’s debt crisis and the franc’s strength hamper foreign sales. The government on Dec. 13 lowered its projections for 2012 growth to 0.5 percent from 0.9 percent, and the Swiss central bank this month said “the substantial appreciation of the Swiss franc over the summer is weighing heavily” on the economy.

Italy to Tap Markets With $11 Billion Sale of Bonds as Monti Eyes Growth (Source: Bloomberg)
Italy will sell as much as 8.5 billion euros ($11 billion) in bonds today, one day after borrowing costs plunged at an auction of shorter-maturity debt. The Treasury in Rome will sell bonds maturing in 2014, 2018, 2021 and 2022. Italy yesterday sold 9 billion euros of 179-day bills to yield 3.251 percent, down from 6.504 percent at the last auction on Nov. 25, after the European Central Bank offered unlimited three-year loans to euro-area banks last week. The ECB’s measures “have clearly helped” and yesterday’s sale augurs well for today’s “more challenging auction of longer-term paper,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mail. Today’s auction results are expected shortly after 11 a.m. in Rome.

Italy’s Borrowing Costs Decline at Auction After Government Agrees on Cuts (Source: Bloomberg)
Dec. 28 (Bloomberg) --Italy sold 9 billion euros ($11.8 billion) of six-month Treasury bills, meeting its target, and borrowing costs plunged after the European Central Bank provided euro-region lenders with unlimited three-year loans last week. The Rome-based Treasury sold the 179-day bills at a rate of 3.251 percent, down from a 14-year-high of 6.504 percent at the last auction of similar-maturity securities on Nov. 25. Investors bid for 1.7 times the amount offered, up from 1.5 times last month. Demand “was quite good, a sign that market tensions have considerably eased from a month ago and that ECB liquidity may be working to support demand,” Luca Cazzulani, a senior fixed- income strategist at UniCredit Global Research in Milan, said in a note published today.

20111229 1021 Global Commodities Related News.

Ex-Tropical Cyclone Grant May Re-Form (Source: CME)
The former Tropical Cyclone Grant could re-form as it tracks eastward across the Gulf of Carpentaria off Australia's northern coast, the Bureau of Meteorology said Wednesday. Gales aren't expected in the Gulf's coastal areas abutting Queensland state over the next 24 hours, but could develop later, the bureau reported in a statement at 0618 GMT. Heavy rain is expected to cause flooding of low-lying areas over the east-central areas of the Gulf in the Northern Territory, while heavy rain potentially leading to flooding is expected to develop across Cape York Peninsula and northern parts of the Gulf Country districts in Queensland Thursday and Friday, it said. The Gulf region is relatively sparsely populated, but hosts a number of mining projects, with production most shipped out through ports such as Weipa and Karumba in the eastern Gulf and from Groote Eylandt in the west. The bureau issued a high seas warning for eastern Arafura Sea, north of the Gulf.
Meanwhile, rail operator Genesee & Wyoming Inc. (GWR) reported one of its trains derailed near a bridge about 40 kilometers north of Katherine town in the Northern Territory, with three wagons hauling shipping containers and two wagons containing copper concentrate toppling into a river. The line to Darwin, mostly used for hauling bulk freight, is out of service, with crews inspecting the bridge and making plans to repair the 350 meters of damaged track. This will cause only minor disruptions to the supply of goods, including food, the company said in a statement. Northern Territory Chief Minister Paul Henderson said rains associated with the former tropical cyclone caused widespread flooding in the Northern Territory's Top End, with damage to roads and bridges. In a weekly tropical climate note, the bureau said it expects above-average rainfall and strong winds will continue across northern parts of the continent until early January.

Corn (Source: CME)
US corn futures end up for the eighth day in a row as South America's hot, dry weather fuels continued gains. Market posted modest early gains and then jumped at mid-day, as weather forecasts failed to show any relief for Argentina's crop. Traders note technical buying, and say possibility of a smaller South America crop could boost export demand in the US. Funds bought an estimated 8,000 contracts today, but some traders say the recent rally is fueled by short-covering and year-end positioning. Market sets a fresh six-week high. CBOT March corn ends up 9 1/4c to $6.42 1/2.

Wheat (Source: CME)
US wheat futures end higher Wednesday as the market continues to get pulled higher by corn. Hot, dry South America weather is threatening the corn crop and is the dominant factor in grains. Wheat dragged higher since smaller corn supplies could mean more demand for wheat as feed. Export demand remains weak, however, and traders say gains fueled largely by short-covering. Like corn, CBOT wheat up 8 days in a row. March CBOT wheat ends up 6 1/2c to $6.51 1/4 a bushel, KCBT March wheat up 3 1/2c to $6.99 1/4 and MGEX March wheat up 1/2c to $8.63.

Rice (Source: CME)
US rice futures end lower Wednesday for the fourth straight day on poor demand. A stronger dollar weighed on commodities. CBOT Jan. rice ends down 5c to $13.75 per hundredweight. The market is down from a high of $14.28 1/2 a week ago, but remains above the December low of $13.50 1/2.

US soy, corn drop from 6-wk tops, farmer selling weighs
SINGAPORE, Dec 28 (Reuters) - U.S. soybeans slid 1 percent, after climbing to a six-week top in the last session, while corn eased as higher farmer selling and a broad-based weakness in the global markets prompted investors to book profit.
"The farmers had kept the supply in the physical market very tight until they saw the rally," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney. "Now they are cashing in on the rally, that is the move which has motivated some selling."

Kazakh rail firm says Dec grain exports to hit 1 mln T
ALMATY, Dec 28 (Reuters) - Kazakhstan's state railway monopoly said on Wednesday it will ship 1 million tonnes of the country's record grain harvest for export in December.
Kazakhstan Temir Zholy said its grain exports in the three months to December would rise by 147 percent from the same period last year, as the country steps up shipments to the Caucasus and ports on the Black Sea and Baltic Sea.

Crop scout Cordonnier cuts S. America crop size
CHICAGO , Dec 27 (Reuters) - Widely followed crop scout Michael Cordonnier has cut his estimates for South American corn and soybean production for 2011/12 and indicated further reductions may be necessary.
"Certainly this is an ominous forecast and if it verifies it would cause more harm to the crops and begin to stress soybeans when they're flowering and setting pods," Cordonnier said.

China 2012 Grain Output Target Above 525M Tons (Source: CME)
China will make every effort to stabilize grain output at more than 525 million metric tons in 2012, Minister of Agriculture Han Changfu said Wednesday, the state media Xinhua News Agency reported.
Han told the annual central conference on rural work that China would keep grain crop acreage stable next year and prioritize improving unit yield, Xinhua said.
China produced a record 571.21 million tons of grain in 2011, up 4.5%, the National Bureau of Statistics said earlier.

Sugar around three-week peak, coffee steady
LONDON, Dec 28 (Reuters) - ICE raw sugar futures hovered around three-week highs and arabica coffee and cocoa were little changed in thin post-Christmas volumes early, with many players in the softs complex away until after the New Year holidays.
ICE raw sugar futures firmed on light investor buying and book-squaring, trading around a three-week peak, with potential upside in prices pressured by big crops in the EU, Russia, Ukraine, India and Thailand.

Vietnam's coffee supply squeeze to perk up global prices
SINGAPORE/HANOI, Dec 28 (Reuters) - Global coffee prices may surge early next year as tighter bank lending in top robusta producer Vietnam chokes off cash to exporters, cutting supply and pushing up premiums even as the harvest rolls in.
London robusta prices could rise by about 10-20 percent, leaving roasters with no choice but to pay up until farmers in Vietnam decide to release stocks and beans from other key coffee growers resurface in the second quarter of 2012.

Vietnam's Dec coffee exports ease 8.5 pct y/y-govt
HANOI, Dec 28 (Reuters) - Vietnam exported an estimated 150,000 tonnes, or 2.5 million bags, of coffee in December, a drop of 8.5 percent from the same month last year, the government said on Wednesday.
November's coffee export volume was revised up to 70,700 tonnes from 50,000 tonnes estimated earlier, the government's General Statistic Office said in its monthly report.

Dry spell still a concern in Ivorian cocoa regions
DAKAR, Dec 27 (Reuters) - Prolonged drought conditions mixed with the dry harmattan wind last week in most of Ivory Coast's cocoa regions could reduce the size and hamper the quality of Ivorian main cocoa crop, farmers said on Tuesday.
The harmattan, which blows south from the Sahara from December to March, is sweeping through most of Ivory Coast's cocoa regions, reducing air moisture needed for the development of cocoa pods.

Argentine 2011 biodiesel exports soar to $1.9 bln
BUENOS AIRES, Dec 27 (Reuters) - Argentine biodiesel exports rose more than 58 percent to $1.9 billion in 2011 compared with the year before, the country's main biodiesel industry group said on Tuesday.
In volume terms, biodiesel exports from the South American country shot 18.5 percent higher to 1.6 million tonnes, according to a statement from the Argentine Biofuels Chamber, or CARBIO, as it is known by its Spanish initials.

New Forms Of Biofuel Fall Short (Source: CME)
Hopes for a surge in production of alternative biofuels are falling flat, and the U.S. expects to continue to rely on corn- and sugarcane-based ethanol to meet a national mandate for renewable fuels in 2012. The Environmental Protection Agency said Tuesday that a tiny fraction -- less than one-tenth of 1% -- of renewable fuels required to be used in the U.S. next year will come from cellulosic biofuel, based on projected production volumes, despite a congressional target that the fuel made from plant stalks and other inedible materials account for more than 3% of the total. The agency sets volume requirements for renewable fuels every year to implement a 2007 law that requires refiners to use increasing amounts of renewable fuels in gasoline. Cellulosic fuel, which can be made from plant waste such as corncobs, is still far from being able to meet volume mandates laid out by Congress, the EPA said Tuesday, confirming a draft analysis it had published earlier this year.
Instead, the agency will require refiners to use other types of advanced biofuels, including sugarcane ethanol. The EPA said it would set the required volume of cellulosic fuel at 8.65 million gallons for 2012. Congress had set a goal of using 500 million gallons next year, on the way to 16 billion gallons in 2022. The EPA has the option to cut the target based on industry capacity to produce the more advanced fuels. Although the EPA set the requirement well below Congress's goal, its decision still irked refiners. Companies will have to buy credits from the EPA if they can't find enough cellulosic ethanol to purchase -- even though the fuel may not be available. "The [EPA's] cellulosic number is still conjecture-based fantasy," said Stephen Brown, vice president for government affairs for refiner Tesoro Corp.
The credits cost about $1.20 per gallon, according to Charles Drevna, president of the National Petrochemicals and Refiners Association. "Once again, refiners are being ordered to use a substance that is not being produced in commercial quantities -- cellulosic ethanol -- and are being required to pay millions of dollars for failing to use this nonexistent substance. This makes no sense," he said. Brooke Coleman, executive director of the Advanced Ethanol Council, which represents advanced-biofuel companies, said Congress built flexibility into the mandate because "there was always a chance" the industry wouldn't meet the schedule. "It shouldn't surprise anyone with the state of the economy, the state of the financial world, the state of the banks. . .that there are delays in implementation of new technologies," Mr. Coleman said.
Overall, the 2007 law says the U.S. must use 36 billion gallons of renewable fuels per year by 2022, including 16 billion gallons of cellulosic biofuel. According to a National Academy of Sciences report published this year, the latter target won't be met "unless innovative technologies are developed that unexpectedly improve the cellulosic biofuels production process."

Brent drops below $109; Iran threat supports
SINGAPORE, Dec 28 (Reuters) - Brent crude edged down after rallying for six straight sessions, but prices continued to hover near $109 per barrel supported by Iran's threat to halt oil shipments through the Strait of Hormuz and positive U.S. data.
"The U.S. is ending the year so far on a rather upbeat note, which is good for oil," said John Vautrain, a director at energy consulting firm Purvin & Gertz.

Vietnam 2011 crude exports +3.6 pct y/y-govt
HANOI, Dec 28 (Reuters) - Vietnam's crude oil exports this year are estimated to have risen 3.6 percent from a year ago to 8.27 million tonnes, or 166,000 barrels per day, the government said on Wednesday.
The General Statistics Office said the full-year crude exports generated $7.24 billion, a 45.9 percent increase from a year ago.

Japan's Nov crude imports from Iran tumble, tanker delay cited
TOKYO, Dec 28 (Reuters) - Japan's crude imports from Iran tumbled 38 percent last month to 1.09 million kiloliters (228,000 barrels per day) from a year earlier, a decline that a source at an importer attributed to a delay in at least one tanker arrival rather than sanctions-related problems.
Iran is facing the threat of fresh sanctions from the United States and European Union over its nuclear programme that could prevent Asian refiners from paying for Iran's oil, and European refiners from buying it.

Iran threatens to stop Gulf oil if sanctions widened
TEHRAN, Dec 27 (Reuters) - Iran threatened on Tuesday to stop the flow of oil through the Strait of Hormuz if foreign sanctions were imposed on its crude exports over its nuclear ambitions, a move that could trigger military conflict with economies dependent on Gulf oil.
Western tensions with Iran have increased since a Nov. 8 report by the U.N. nuclear watchdog saying Tehran appears to have worked on designing an atomic bomb and may still be pursuing research to that end. Iran strongly denies this and says it is developing nuclear energy for peaceful purposes.

Oil Trades Near One-Week Low on U.S. Stockpile Gain, European Debt Crisis (Source: Bloomberg)
Oil traded near the lowest level in a week in New York after a report showed U.S. crude stockpiles surged last week, indicating fuel demand may be weakening as Europe’s debt crisis threatens to slow the global economy. Futures were little changed after sliding 2 percent yesterday, the first decline in seven days, as record lending by the European Central Bank signaled the growing risk of the region’s crisis. U.S. inventories increased 9.57 million barrels last week, according to the industry-funded American Petroleum Institute. An Energy Department report today was forecast to show supplies fell 2.5 million in a Bloomberg News survey. Crude for February delivery was at $99.45 a barrel, up 9 cents, in electronic trading on the New York Mercantile Exchange at 8:19 a.m. Singapore time. The contract yesterday fell $1.98 to $99.36 in the biggest decline in two weeks. Prices are up 8.8 percent this year after climbing 15 percent in 2011.

Japan Nov zinc exports up 64 pct, led by China
TOKYO, Dec 27 (Reuters) - Japan's exports of refined zinc surged to 11,712 tonnes in November, up 64 percent from a year earlier, driven by a three-fold jump in exports to China, customs-cleared data showed on Tuesday.
Exports to China increased to 3,578 tonnes, up from 1,191 tonnes a year before, replacing Taiwan as the top importer of Japan's refined zinc and accounting for about 30 percent of total exports.

China 2012 rare earth quotas unchanged from 2011
BEIJING, Dec 27 (Reuters) - China will keep rare earth export quotas for 2012 at this year's levels, it said on Tuesday, a move that will ease overseas worries about the supply of 17 crucial elements used in high-tech manufacturing.
China accounts for more than 95 percent of the global output of rare earths, which are used in the electronics, defense and renewable energy industries.

Vale giant ore ship makes maiden arrival in China
SHANGHAI/SINGAPORE, Dec 28 (Reuters) - China has received the first of Vale's  giant iron ore vessels, industry sources said on Wednesday, a major breakthrough for the Brazilian miner after months of uncertainty over the fleet's access to the world's top steelmaker.
Top iron ore exporter Vale is spending billions of dollars to build the world's biggest dry bulk ships to cut the cost of shipping the steelmaking ingredient to China, but until now had failed to gain Beijing's approval for the six vessels already on the water to even stop at a Chinese port.

China steel products demand to reach 646 mln T in 2012 - report
SHANGHAI, Dec 28 (Reuters) - China's consumption of steel products is expected to reach 646 million tonnes in 2012, marginally higher than this year's level, the state-owned China Securities Journal reported on Wednesday.
The report said the China Metallurgical Industry Planning and Research Institute had estimated consumption of finished steel products in the world's top steel producer and consumer at 610 million tonnes this year.

Japan Q1 crude steel demand seen at near 2-yr low
TOKYO, Dec 27 (Reuters) - Japanese demand for crude steel is expected to fall 6.2 percent from a year earlier to an almost two-year low of 26 million tonnes in the January-March quarter, as a plunge in steel exports outweighs strong demand from the domestic auto sector, the trade ministry said on Tuesday.
The ministry estimates Japan's annual crude steel output for the year to March 2012 at 105.92 million tonnes, 4.87 million tonne, or 4.4 percent, less than a year ago.

METALS-London copper falls as U.S. housing prices sag
KUALA LUMPUR, Dec 28 (Reuters) - London copper dropped on Wednesday, snapping four days of gains, on concerns that demand for the metal may wane after a report showed weak house prices in the United States, the world's largest economy.
A more-than-expected slump in Japan's November factory output after Europe's debt crisis and flooding in Thailand hit major manufacturers also hurt copper prices.

PRECIOUS-Gold inches down as growth concerns weigh
SINGAPORE, Dec 28 (Reuters) - Gold edged lower on Wednesday, tracking falls in industrial metals and equities, as concerns about global economic growth weighed on market sentiment amid thin year-end trading volumes.
Investors were cautious as the latest data out of the United States sent mixed signals. Improving labour market conditions lifted consumer confidence to an eight-month high in December, but persistently weak house prices remain an obstacle to faster economic growth.

Gold Posts Longest Slump Since 2009 (Source: Bloomberg)
Gold fell, capping the longest slump since October 2009, and silver tumbled to a three-month low as Europe’s deepening debt crisis drove commodities and stocks lower. The euro dropped to an 11-month low against the dollar as lending to financial institutions sent the European Central Bank’s balance sheet to a record high. The Standard & Poor’s GSCI index of 24 raw materials and the MSCI World Index of equities were poised for the biggest declines in two weeks. Platinum approached the lowest since November 2009, and palladium dropped almost 3 percent. The ECB said lending to euro-area banks jumped 214 billion euros ($276.9 billion) to 879 billion in the week ended Dec. 23, bolstering credit to the economy during the fiscal turmoil. Gold has slumped 19 percent from a record $1,923.70 an ounce on Sept. 6, partly on sales to cover losses in other markets. About $10 trillion has been erased from global equities (MXWD) since May.

20111229 1020 Soy Oil & Palm Oil Related News.

Weather-related concerns drove crude palm oil  (CPO) futures on Bursa  Malaysia Derivatives Exchange to their highest in over five weeks yesterday, as  traders raced to cover positions in anticipation of heavy rains disrupting production in Malaysia and Indonesia. Contracts for February 2012 delivery  rose to RM3,185 per tonne yesterday, the highest level since Nov 18 when they  closed at RM3,248 per tonne. Climate-related impact on the production of  soyabean, a rival oilseed, in Argentina and Brazil also shored up prices.  (Financial Daily)

Soybeans (Source: CME)
US soy futures end lower Wednesday, retreating from sharp recent gains amid profit-taking and farmer selling. The market rallied at mid-day on spillover support from corn but later pulled back. While hot, dry weather is a concern for South American crops generally, it is not yet as much an issue for soybeans, traders say. Traders also question whether demand can stay strong above $12. CBOT Jan. soybeans end down 1 1/2c to $11.98 1/4 a bushel.

Soybean Meal/Oil (Source: CME)
March CBOT soyoil ends down $0.07 to $52.16. March soymeal joins corn and wheat, ending up $2.40 to $314.10 per short ton.

S.American soy crop fear lifts palm oil to 5-week high
KUALA LUMPUR, Dec 28 (Reuters) - Malaysian crude palm oil futures climbed to a near five-week high as dry weather in South America sparked concerns about lower soybean yields, potentially tightening soyoil supplies.
"In the short term, the euro zone debt crisis will fade from palm oil traders' focus," said a trader with a foreign commodities brokerage in Kuala Lumpur.

South Brazil, key Argentina soy critically dry
BRASILIA, Dec 27 (Reuters) - No rain is in sight for thirsty soy-growing areas in southern Brazil and in Argentina, forecasters said, threatening crops already hit by long dry stretches and causing futures prices to jump on Tuesday.
December rainfall in Brazil's southernmost state Rio Grande do Sul has been far below the average, which is bad for newly seeded crops, and the situation is growing critical in neighboring Argentina, the top exporter of soy-derived products.

South Brazil soy to stay dry, mostly wet elsewhere
BRASILIA, Dec 27 (Reuters) - Brazil's southernmost soy state Rio Grande do Sul should be dry for the rest of the year, forecaster Somar said Tuesday, with rainfall in December far below the average, threatening the newly-seeded crop with no rain on the horizon.
The center west and southeast, including Brazil's No. 1 soy state Mato Grosso, will see plentiful rain from now through early January, helping plants mostly at a later stage of development. Mato Grosso harvesting should begin within days.