Monday, February 13, 2012

20120213 1818 FCPO EOD Daily Chart Study.

FCPO closed : 3168, changed : +37 points, volume : lower.
Bollinger band reading : correction range downside biased.
MACD Histrogram : recovering, seller leaving as buyer testing market.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
19 points range FCPO closed rebounded higher with decreasing volume transacted. Soy oil price currently trading higher after last Friday closed nearly unchanged while crude oil price trading higher.
Positive progress over Greece bailout, weaker U.S. Dollar, little worries over slowing output level and South America soybean crop lifted FCPO price higher in positive zone through out the day.
Chart study still suggesting a correction range bound downside biased market development testing support and resistance level near middle Bollinger band.
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.

20120213 1732 FKLI EOD Daily Chart Study.

FKLI closed : 1558.5, changed : +5.5 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : rising, buyer in control.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded gain with little improved but relatively low volume changed hand doing 4 points discount compare to cash market that closed marginally higher. Last Friday U.S. markets closed recorded loss and today Asia markets ended higher while European markets currently recording gains.
News on positive progress over Greece parliament austerity measures approval and China Premier statement on early economic policy fine tunes should be within Q1 resulted global market to trade higher.
Technical chart remained suggesting a pullback correction upside biased market development.
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.

20120213 1705 Regional Markets EOD Daily Chart Study.

  DJIA chart reading :  pullback correction upside biased.
 Hang Seng chart reading : correction range bound upside biased.
KLCI chart reading : pullback correction upside biased.

20120213 1618 Global Market & Commodities Related News.

Markets gain modestly as Greece passes austerity bill
TOKYO, Feb 13 (Reuters) - Asian shares and the euro gained modestly, relieved after Greece came a step closer to securing a much-needed bailout fund and avoiding a messy default, although most of the recent optimism appears to have been already priced in.
"Given that the recent risk-taking sentiment has been based on an assumption that a disorderly default will be avoided, the approval confirms that this assumption is still valid and will support sentiment," Junya Tanase, chief currency strategist at JPMorgan Chase in Tokyo.

FOREX-Euro gains as Greece passes austerity steps
TOKYO, Feb 13 (Reuters) - The euro edged up on Monday after Greece's parliament approved an austerity bill that put the country a step closer to securing much-needed funds, though market players worried about more hurdles before lenders seal a bailout deal.
Violent street protests in Athens and the departure of six Greek cabinet ministers underscored the difficulty of implementing unpopular steps.

US wheat up 1.2 pct, corn firm on Greek austerity bill
SINGAPORE, Feb 13 (Reuters) - U.S. wheat rose 1.2 percent and corn gained 0.8 percent following losses last week, buoyed by hopes that Greece can avoid a default after lawmakers passed an austerity bill to secure a bailout.
"Last week we saw prices fall largely due to the economic concerns and USDA report, but today because of positive news from Greece, there is some support for the grain markets," said Lynette Tan, an analyst with Phillip Futures in Singapore.

NCC sees US 2012 cotton plantings at 13.63 mln acres
NEW YORK, Feb 12 (Reuters) - Industry group the National Cotton Council forecast on Saturday that U.S. 2012 cotton plantings would reach 13.63 million acres, down 7.5 percent from 2011.
"The expected drop in cotton area is consistent with current market signals. Since 2011, cotton prices have weakened relative to competing crop such as corn, soybeans and peanuts," NCC Vice President Gary Adams said in an annual survey release on the group's website.

Argentina early-planted corn hit by drought-gov't
BUENOS AIRES, Feb 10 (Reuters) - Argentina corn planted early in the 2011/12 season was hit hard by weeks of drought at the turn of the year, while recent rains have refreshed late-seeded crops, the Agriculture Ministry said in a report on Friday.  
The South American country is the world's second biggest corn exporter after the United States and the prolonged dry spell has dimmed prospects that it will be able to replenish global supplies to make up for a disappointing U.S. crop.

Frost hits grain crops in parts of east Europe
SOFIA, Feb 10 (Reuters) - Freezing temperatures coupled with a lack of snow cover in some parts of eastern Europe have badly damaged winter sowings and will lower 2012 grain crops, farmers and meteorologists said.
A cold snap in early February, when temperatures plunged to minus 30 degrees Celsius, has damaged 40 percent of winter grain crops in major Black Sea producer Ukraine and is posing risks to sowings in smaller grain exporter Bulgaria as well as in the Czech Republic  .

Vietnam's Jan coffee exports plunge, sales expected to pick up
HANOI, Feb 10 (Reuters) - Vietnam's coffee exports plunged nearly 48 percent in January from a year ago because of the Tet new year festival and as farmers held back beans in the expectation of higher prices later, but traders expect sales to pick up this month.
Customs data showed January coffee exports dropped to a little more than 112,000 tonnes, or 1.87 million 60-kg bags, from 215,000 tonnes in the same month last year. Last month's bean exports were also down 27.9 percent from December levels.

Brent rises over $118 after Greece passes bill
SINGAPORE, Feb 13 (Reuters) - Brent crude rose above $118, supported by a weaker dollar and expectations of a revival in demand growth after Greek lawmakers approved an austerity bill to secure a second bailout.
"Oil has been trading in a tight range for the past couple of weeks and we're now moving towards the higher end of the range," said Victor Shum, senior partner at oil consultancy Purvin & Gertz. "I don't expect we're going to rally ahead in a big way...with protests raging everywhere in the country, it's not exactly an image of confidence."

Aluminium losing battle against oversupply
LONDON, Feb 10 (Reuters) - Excess capacity in aluminium smelting will drag on for years to come, even while losses weigh on producers, as political pressures in China and Russia to keep jobs and push self-sufficiency prevent or delay plant closures.
Rio Tinto   acknowledged a gloomy outlook for the sector this week, when it slashed the book value of its Alcan unit by $9 billion.    Rio Chief Executive Tom Albanese warned margins may continue to be squeezed in the medium term. "The current environment in the aluminium industry is tough ... I can't predict when the price will recover."

Speculators up gold, silver, copper length again-CFTC
Feb 10 (Reuters) - Money managers in gold, silver and copper futures and options raised their net long position in the week of Feb. 7, as investor interest in the three metals continued to recover after recent disappointing performance.  
Speculators in gold increased their bullish bets in the precious metal to the highest in nearly six months, while they increased their bullish exposure in copper for a fourth straight week, latest data from the U.S. Commodity Futures Trading Commission showed on Friday.  

Copper on front foot, Greece deal fuels rebound
SHANGHAI, Feb 13 (Reuters) - London copper rallied  , recovering from last week's sell-off, after the safe passage of Greece's austerity bill enhanced the allure of risky assets.
"Europe's just a mess," said Liu. "After the Chinese new year, the pace of demand recovery has been slower than expected, so we have seen the physical markets suffer some pressure.

Southern Copper sees 2012 copper output up 9 pct
LIMA, Feb 10 (Reuters) - Southern Copper , a major global copper producer, expects its 2012 output to increase nearly 9 percent from the previous year, the company said during a conference call on Friday.
Production of the red metal is seen at 640,000 tonnes in 2012, up from the company's 2011 output of 587,491 tonnes.
"We expect production of 610,000 from our own operations and 30,000 tonnes to be processed from third parties," said Raul Jacobs, chief financial officer for Peruvian operations.

METALS-Copper on front foot, Greece deal fuels rebound
SHANGHAI, Feb 13 (Reuters) - London copper rallied on Monday, recovering from last week's sell-off, after the safe passage of Greece's austerity bill enhanced the allure of risky assets.
Three-month copper on the London Metal Exchange  rose by 0.88 percent to $8,560 a tonne by 0505 GMT, clawing back some losses from the previous session when prices fell 3 percent.

PRECIOUS-Gold rises on Greek austerity bill, off 2-week low
SINGAPORE, Feb 13 (Reuters) - Gold strengthened on Monday in line with gains in shares and the euro after Greece's parliament finally approved a deeply unpopular austerity bill to secure a second bailout from the European Union and the IMF to avoid bankruptcy.  
Physical buying from China also helped lift gold  up$6.10 an ounce to $1,725.49 by 0236 GMT. Bullion fell to $1,703.69 on Friday, its lowest since late January, as uncertainty over negotiations for Greece's bailout package prompted investors to cash in.  

Gold rises on Greek austerity bill, off 2-week low
SINGAPORE, Feb 13 (Reuters) - Gold strengthened  in line with gains in shares and the euro after Greece's parliament finally approved a deeply unpopular austerity bill to secure a second bailout from the European Union and the IMF to avoid bankruptcy.  
"We are still looking for more measures out of Europe before we see a sustainable risk rally. Yes, perhaps it's good that we have a second bailout package and we are sure that at least we are not going to see Greece defaulting," said Ong Yi Ling, an analyst at Phillip Futures.

20120212 1101 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets gain modestly as Greece passes austerity bill
TOKYO, Feb 13 (Reuters) - Asian shares and the euro gained modestly on Monday, relieved by the Greek parliament's passage of austerity measures which put the country a step closer to securing a much-needed bailout fund and avoiding a messy default.  "Given that the recent risk-taking sentiment has been based on an assumption that a disorderly default will be avoided, the approval confirms that this assumption is still valid and will support sentiment," Junya Tanase, chief currency strategist at JPMorgan Chase in Tokyo.

COMMODITIES-Markets retreat as dollar rises on Greek bailout woes
NEW YORK, Feb 10 (Reuters) - Oil and copper fell sharply on Friday, snapping their run this week to multi-month highs, and crop prices extended a bearish streak after the dollar rose on doubts over Greece's latest bailout deal.
"The market has paused for breath after its sustained rally," Mark Thomas, energy trader for Marex Spectron in London, said, referring to Friday's retreat in both U.S. crude and London's Brent oil.

NYMEX-Crude falls on Greek, oil demand worries
NEW YORK, Feb 10 (Reuters) - U.S. crude oil futures fell on Friday for the first time in four sessions after a far-right party in Greece refused to sign off on austerity measures, denting the country's efforts to secure an EU-IMF bailout package to avoid a crippling debt default.
"The market appears to be pricing in a worst-case scenario that would include the possibility of further slippage in the euro back to below the $1.30 area," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Italy sees gas shortfall from Russia on Sunday
MILAN, Feb 12 (Reuters) - Italy, a major consumer of Russian gas in Europe, expects to inject 93.5 million cubic metres (mcm) of gas from Russia into the national network on Sunday compared with the 107.5 mcm requested, data from gas transport network Snam  showed.
The 13 percent shortfall in Russian gas flows compares with the 13.7 percent shortfall seen on Saturday.

US oil demand to be sluggish for years: Lee Raymond
boost domestic oil demand in the short term, the former head of oil supermajor ExxonMobil  told Reuters.
Lee Raymond, 73, is renowned in the industry as the chief executive and chairman of Exxon from 1993 to 2005, including after its merger with Mobil in 1999 to form the world's largest listed oil company. The South Dakota native is today a director of bank JPMorgan Chase , among other positions.

US natgas futures mostly end higher ahead of cold wkend
NEW YORK, Feb 10 (Reuters) - U.S. natural gas futures mostly ended higher on Friday, with chilly weekend forecasts and reports of some production cuts underpinning prices despite a light weekly inventory withdrawal and a milder extended weather outlook.
"Producers have created some support by talking about shut ins, and we've got a cold spell moving across the country now, but the weather outlook is not very supportive after Tuesday," said Steve Mosley at SMC Advisory Services in Arkansas.

Euro Coal-Prices dip again, stockpile space fills
LONDON, Feb 10 (Reuters) - Prompt physical coal prices slipped by around 75 cents for the third day running, despite freezing European weather that has boosted gas and power values due to a surge in heating demand, because utilities have little available storage space.  
"If anybody was to be buying actively right now, it ought to be the big utilities who can play the contango, if they've got space to stockpile," one European trader said.

20120213 0953 Global Economic Related News.

Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said Asia is at the cusp of experiencing significant collective economic growth and development. And Asian economies would be better positioned to collectively strive and work towards achieving the shared vision of financial and economic integration, she said. This would not only unlock their potential but also enhance the prospects to contribute towards a more balanced and sustainable global economy, she said. (Bernama)

The government is confident that the country’s economy will grow more than 5% this year as targeted, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said. The effectiveness and success of the Government Transformation Programme and Economic Transformation Programme would help to expand the economy, he said. (BT)

The International Monetary Fund (IMF) said Malaysia is well-positioned to face the challenging external environment but said public finances and structural reforms are crucial to raise the country’s growth potential for a more balanced growth. The IMF has projected Malaysia’s economy to slow to 4% in 2012 from a projected 4.7% in 2011. It expects inflation to ease and remain contained. (BT)

China: China to fine-tune policy early as first quarter
Chinese Premier Wen Jiabao said the nation should take preemptive measures and start “fine-tuning” economic policies as early as in the first quarter, according to Xinhua News Agency. Economic conditions in Jan and the first quarter deserve attention, Wen told business executives last week in Beijing as he sought opinions on a government report, the official news agency reported. China’s exports and imports fell for the first time in two years in January and lending grew less than estimated, adding to signs growth is weakening in the world’s second-largest economy. [Bloomberg]

China's banking regulator, the China Banking Regulatory Commission, has drafted rules to stop banks from charging their customers excessive fees. All fees must now be set by banks' head offices and not local branches, and banks must be more transparent when setting prices, giving three months' notice before raising fees. (WSJ)

China exports decreased 0.5% yoy (+13.4% in Dec) and imports fell 15.3% yoy (+11.8% in Dec). The median estimate was for a 1.4% fall in exports and a 3.6% drop in imports. The trade surplus widened to a six-month high of US$27.3bn. (Bloomberg)

Chinese banks extended Rmb738.1bn (US$117bn) of new yuan-denominated loans in Jan. That compares with the median forecast of Rmb1tr and Rmb641bn in Dec. Money (Bloomberg)

Money supply M2 in China expanded 12.4% yoy in Jan (13.6% in Dec). The market was looking for a figure of 13.7% yoy. (Bloomberg)

Thailand’s foreign reserves inched higher to US$178.8bn in the week ended 3 Feb, from US$178.4bn in the previous week. (Bloomberg)

The Thai Commerce Ministry has announced that it will from 20 Feb onwards control the prices of 10 items of ready-to-eat meals at THB15-35, according to Internal Trade Department director-general Vachari Vimooktayon. Food vendors who violate the rule will be subjected to jail term, fine, or will be assessed for back tax by the Revenue Department. (Thai Financial Post)

More than half of Thailand’s small- and medium-enterprises (SMEs) surveyed recently would not raise the daily minimum wage paid to their employees to THB300 to comply with the policy of the government, according to a survey jointly conducted by the Social Innovation Management and Business Analysis Centre at Assumption University and the Personnel Administration Association. A startling 57.3% of the SMEs polled also said they would consider moving their production bases to neighbouring countries. (Bangkok Post)

India: Factory output misses estimate amid economic slowdown

India’s industrial production rose less than estimated in Dec, signaling weakening domestic demand as the global recovery faltered. Output at factories, utilities and mines climbed 1.8% from a year earlier, after a 5.9% advance in Nov, the Central Statistical Office said in a statement in New Delhi. The deterioration in factory output may fan concern India’s growth is slowing after the government forecast the weakest rise in gross domestic product since 2009. The central bank has signaled readiness to cut rates and shield the economy if inflation eases further. [Bloomberg]

Japan: Azumi distances himself from Yen intervention remark
Japanese Finance Minister Jun Azumi distanced himself from his comments to lawmakers that indicated a level that triggered intervention in the yen in Oct. “I instructed an intervention when the yen was 75.63, which could pose a threat to the Japanese economy, and finished when it was 78.20,” Azumi said in the parliament in Tokyo. He didn’t mean that the level prompted intervention, and was referring instead to the yen’s closing price before the 31 Oct sales, he later told reporters. Economists and investors are focused on the possibility of more attempts to weaken Japan’s currency as the government seeks to sustain growth. [Bloomberg]

Japan Economy Minister Motohisa Furukawa was adamant that the Bank of Japan should communicate its inflation goal more clearly, saying “it’s desirable for the BOJ to consider whether there’s a better way for the public to understand its inflation policy.” BOJ policy makers had pledged to keep interest rates near zero unless they judge that “price stability is in sight.” (Bloomberg)

Pakistan: Holds rate as price surge curbs scope to aid growth
Pakistan’s central bank left interest rates unchanged for a second meeting as the fastest inflation in Asia after Vietnam curbs scope to ease policy and bolster growth. The State Bank of Pakistan kept the discount rate at 12%. Pakistan, which joins South Korea and Australia in holding rates this week, faces inflation exceeding 10%, faltering growth following floods in 2010 and 2011 and an insurgency near the Afghan border. The disasters, security risks, elevated price pressures and a budget shortfall have left the economy “highly vulnerable,” the International Monetary Fund has said. [Bloomberg]

Philippine exports declined 20.7% yoy to US$3.3bn (-19.4% in Nov). The median estimate was for a 17.4% drop. (Bloomberg)

UK: January producer prices rise faster-than-expected
UK factory output prices rose in January at the fastest pace in nine months as manufacturers raised prices of alcohol, petroleum products and clothing. The cost of goods at factory gates climbed by 0.5% from Dec, the Office for National Statistics said in London. Companies may find it hard to keep increasing prices as demand weakens. The Bank of England, which yesterday pledged to pump an extra GBP50bn (USD79bn) into the ailing economy, expects consumer-price inflation to fall below their 2% target by the end of the year. [Bloomberg]

Greek unemployment rate soared in Nov to 20.9% (18.2% in Oct; 13.9% in Nov 2010), with the total number of unemployed standing at 1.029m, an increase of 126,062 from Oct (692,577 in Nov 2010), according to the Hellenic Statistical Authority. Young people remain the hardest hit by Greece's deepening recession, with a staggering 48% of those aged between 15 and 24 without a job in Nov (35.6% in Nov 2010). (WSJ)

Greek industrial output fell 11.3% yoy in Dec (-7.8% in Nov), with austerity measures identified as the culprit behind this phenomenon. (WSJ)

EU: Greek parliament passes austerity bill as rioters burn buildings
Greek Prime Minister Lucas Papademos won approval from parliament for austerity measures to secure an international bailout after at least 151 members of the chamber voted for the measure, according to a tally of votes. The roll-call voting in Athens is being televised live on state-run Vouli TV and took place as police battled rioters in Athens protesting the measures including state jobs cuts. Ten buildings were set on fire in central Athens by protesters including a Starbucks Corp. cafe, a bank and a movie theater, a fire department spokesman said, speaking on the condition of anonymity in line with official policy. [Bloomberg]

US: Trade deficit in U.S. climbed in December to six-month high
The trade deficit in the U.S. widened in Dec to a six-month high as a strengthening economy prompted bigger gains in imports than exports. The gap increased 3.7% to USD48.8bn from USD47.1bn in Nov, Commerce Department figures showed in Washington. Purchases of goods and services produced overseas were the strongest in more than three years on record demand for capital equipment like machinery and semiconductors. Imports may keep rising as an improving job market underpins consumer spending, and businesses rebuild inventories and replace outdated equipment. [Bloomberg]

US President Barack Obama will revive proposals for US$1.5tr in tax increases as well as spending to boost jobs as part of a 2013 budget request that projects the deficit shrinking next year to US$901bn, according to administration officials. The tax increases would mostly fall on the wealthy, through a new 30% minimum tax on those earning more than US$1m annually, allowing Bush-era tax cuts to expire for families taking home more than US$250,000 and capping the value of itemised deductions for top earners at 28%. (Bloomberg)

American billionaire George Soros slammed German Chancellor Angela Merkel in an interview published on Sun, warning that her policies could lead to a repeat of the Great Depression. "I admire Chancellor Merkel for her leadership. But unfortunately she is taking Europe in the wrong direction," he said, whilst warning against addressing the crisis with spending cuts, urging the injection of funds instead. (AFP)

The monthly US budget deficit narrowed to US$27.4bn in Jan from US$49.8bn in the same month a year earlier, partly because some US$16bn of military active duty pay, veterans' benefits and Medicare payments were accelerated to 30 Dec since 1 Jan fell on a Sun, the Treasury Department said. During the first four months of fiscal 2012, which began 1 Oct, the cumulative deficit narrowed to US$349.1bn from US$418.8bn in the comparable first four months of fiscal 2011. (Reuters)

The US trade gap expanded to US$48.8bn in Dec (US$47.1bn in Nov; originally US$47.8bn). Market expectations were for a gap of US$47.8bn. Exports rebounded 0.7% after declining 1.0% in Nov, whilst imports advanced 1.3% following the 1.0% gain of the prior month. (Bloomberg)

20120213 0952 Malaysia Corporate Related News.

MMC Gamuda appointed PDP
Mass Rapid Transit Corp SB (MRT Corp) has signed an agreement with MMC Gamuda KVMRT (PDP) SB last Friday formalizing the latter’s position as the project delivery partner (PDP) for the country's biggest infrastructure project, the My Rapid Transit (MRT). Under the agreement, the PDP will receive a fee of 6% of the total aggregate work package contract value. Should the eventual total cost of the project be less than or equal to the target cost, the PDP shall be entitled to the full fee. But if the project cost is more than the target cost, the PDP fee shall be reduced in accordance with an agreed formula. MRT Corp CEO Datuk Azhar Abdul Hamid confirmed that the PDP would have to bear cost overrun of the projects that exceed 15%. (StarBiz Week)

Syarikat Prasarana Negara Bhd (Prasarana) hopes to award all LRT Line Extension contracts by 1H12. Its group director for project development, Zulkifli Mohd Yusoff, said the entire project consisting of the Kelana Jaya line and the Ampang line had a combined total of between 40 and 50 contracts. To date, about 80-90% had been awarded while only two stations and the main depot for the Ampang line were still undergoing the process of tendering, he said. The total value of contracts that have been awarded for both lines currently stands at RM4.5bn. For the supply of 20 trains for the Ampang line, estimated to be worth RM1bn, the company was presently evaluating seven supply submissions, Zulkifli said. Trains for the Kelana Jaya line as were ordered last year. (BT)

The target cost of the MY Rapid Transit (MRT) project will be known by 4Q12 after all 90 tenders have been awarded, said Mass Rapid Transit Corp Sdn Bhd (MRT Corp) CEO, Datuk Azhar Abdul Hamid. The target cost was the aggregate of all tenders plus reimbursable capped at RM2.8bn and the contingency amount capped at 6% of the total tender awarded. "We will only know the full tender value of all jobs after they have been awarded. We will be on a better footing towards the end of this year," he said. On the financing for the MRT project, Azhar said the project would be fully financed by the capital market. (Bernama)

Chan to inject Sagajuta into Naim Indah after stake buy
Datuk Raymond Chan, who caused quite a stir when he bought into Harvest Court Industries Bhd late last year has now bought a stake in Naim Indah Corp Bhd (Nicorp) to inject his private company Sagajuta SB via reverse takeover that will see his stake in Nicorp increasing from 12% to 45%. Nicorp told Bursa Malaysia that it had entered into a heads of agreement (HoA) with Generasi Cipta to buy 60% of Sagajuta for RM240m on Thursday. Chan and Tan Tiang Lai are the directors of Generasi. In addition, Nicorp intends to buy the remaining 40% stake in Sagajuta that is not owned by Generasi on similar terms as agreed between Nicorp and Generasi. (StarBiz Week)

MPHB reduces stake in racing club
Multi-Purpose Holdings Bhd (MPHB) has reduced its stake in Philippine Racing Club Inc (PRCI) to 19.94%. In a filing with Bursa Malaysia, the company said it disposed of 13.07% equity interest in PRCI in the open market in the Philippines since 20 Jan for a total of PHB722.41m (RM51.64mil) and estimated to make a gain of about RM17.34m from the disposal. (StarBiz Week)

Deal said to be brewing at Genting Plantations
A deal may be brewing at Genting Plantations, whose stock is just off its all-time high, industry sources said. The shares have risen by some 10.5% YTD and closed yesterday up 10 sen, or 1%, at RM9.51. It hit a record high of RM9.65 on Jan 26. At its current price, Genting Plantations has a market capitalization of some RM7.18bn, which makes it an expensive acquisition target by any party. It is trading at an estimated PE ratio of 16x for the 2012 financial year, somewhat higher than its peers United Plantations, 12x and Sime Darby 15 times, but cheaper than IOI Corp Bhd’s 17x. (StarBiz Week)

Tebrau Teguh soars on JB waterfront project
Property and construction firm Tebrau Teguh Bhd’s share price surged nearly 10%, to 89 sen at the close on heavy trading volume following news reports about plans for the development of the Johor Baru waterfront facing Singapore that may be worth up to RM80bn. Tebrau Teguh was recently the subject of a mandatory general offer (MGO) by Iskandar Waterfront Holdings (IWH), which had acquired Johor government investment arm Kumpulan Prasarana Rakyat Johor’s (KPRJ) 33.15% stake in the former. The exercise would pave the way for the injection of landbank held by businessman Datuk Lim Kang Hoo, the executive chairman of Ekovest Bhd as well as Danga Bay SB CEO, and the Johor government, into IWH. The sale was part of a consolidation exercise which would see IWH become the master developer of the entire waterfront. (StarBiz Week)

IOI mulls relisting of arm
IOI Corp is mulling a relisting of its property arm that would see the group unlock values in that segment and enhance the attractiveness of the parent company to investors as a more plantation-focused company, according to reliable sources. IOI Corp may wish to also time the relisting of its property arm in line with a more bullish view on the property sector. (StarBiz)

Redza denies leaving Bank Muamalat to return to DRB-HICOM
Speculation is rife that Bank Muamalat Malaysia’s executive director and CEO Datuk Mohd Redza would be called back by his former employer, DRB-HICOM, to play a pivotal role in the corporate restructuring of Proton Holdings post. Rumours spread and came about after DRB-HICOM group MD Datuk Seti Mohd Khamil Jamil announced at a media briefing last month that plants to rationalize Proton were being drawn up, and “by taking national carmaker private, things could be done more efficiently.” Mohd Redza was appointed CEO of Bank Muamalat in Nov 2008 and prior to that, he was DRB-HICOM’s executive director and CEO since Mar 2006. Contrary to the statement, “I deny the speculation, and I have another two and half year contract with the bank.” Mohd Redza said. (Malaysian Reserve)

Bank Islam Malaysia Bhd is in early talks to buy a stake in PT Bank Muamalat Indonesia, sources said. Bank Muamalat is controlled by shareholders from the Middle East. Islamic Development Bank, Boubyan Bank Kuwait, and an investment holding company from Jeddah called Sedco Group collectively owned just over 75% of the lender and were looking to sell some of these holdings, the source added. Bank Islam MD Datuk Seri Zukri Samat confirmed that the bank was in preliminary talks with an Indonesian Islamic lender but declined to say if it was Bank Muamalat. "The most important thing is we can do equity accounting. The whole idea is to get a foot in," he said. A stake of at least 20% would allow Bank Islam to do equity accounting. It is unlikely to be interested in buying into Maybank's Indonesian subsidiary, Bank Internasional Indonesia (BII), as the stake up for sale is too small. (BT)

Thailand's national oil and gas company, PTT Public Co Ltd, is believed to have lent its support to a special purpose vehicle (SPV) anchored by CIMB and Muhibbah Engineering, to revive the APH project. PTT has given its commitment that it would continue to honour its 15-year offtake agreement with APH as long as the project gets on track and is completed in accordance with a new work schedule which is part of the restructuring scheme. PTT is not interested in owning the facility. PTT views the facility as one that would be key a infastructure asset to expand its oil trading business to the Far East, sources say. An offtake agreement from a credible player such as PTT is one the key determinants of the financial viability of the project. A successful restructuring of APH would need the consent of 75% of the creditors, including CIMB and Muhibbah. Muhibbah is prepared to convert its debt into equity to revive the project.
KIC O&G, which is controlled by Abdul Rashid Mohamed Isa, is said to be exiting the APH project. (Edge Weekly)

Puncak Niaga is believed to be close to securing a solid waste management contract in Phnom Penh, Cambodia, according to sources. The waste management contract is said to be for landfill disposal of waste materials. On top of that, sources say that Puncak is keen on developing marginal oil fields locally. Sources say that it has submitted a proposal to the Malaysian government, seeking support for its bid to develop marginal oil fields. (Edge Weekly)

The Malaysian Institute of Estate Agents (MIEA) expects a slowdown in the high-end residential property sub-sector this year as potential buyers are likely to maintain a cautious approach in light of the economic uncertainties in Europe and the United States. MIEA president Nixon Paul said the various "checks and balances" by Bank Negara to control the increase in household debt would also affect residential property transactions. Paul said there was an over-supply of condominium units in the country and that rental rates for such units could be affected. Despite this, he said, it would be a good thing now to invest in the high-rise market for long-term investors. (Starbiz)

The Securities Commission is looking to enhance its governance-related guidelines for real estate investment trusts (REITs) to further boost investor’ understanding of the asset class, sources say. Among the areas being looked into are fees structures set by REIT managers and the independence of the trustees. “As part of the SC’s ongoing regulatory review, the exercise, which is primarily to enhance disclosures, is also aimed at boosting investor awareness of the nature of the asset class,” a source says. Another area being looked into is whether guidelines should be more prescriptive on what the ideal benchmark would be to measure a REIT manager’s performance and calculate its fee. As it is, some market watchers reckon that NPI is not an ideal benchmark to calculate management fees as it does not take into account the size of debt and interest charges, which could be substantial for highly-geared REITs. (Edge Weekly)

Feedback is now being gathered on the proposed Sungai Besi-Ulu Kelang Elevated Expressway (Suke) that will connect Sri Petaling and Ulu Kelang. One of the main objectives of the expressway is to provide an alternative route for the MRR2 and lessen traffic congestion that occurs at the Cheras, Pandan Indah and Ampang linkages. The 31.8km three-lane dual carriageway elevated expressway will also link major highways in the eastern Klang Valley including the Duta-Ulu Kelang Expressway (DUKE), Ampang-Kuala Lumpur Elevated Highway (AKLEH), Besraya, KL-Seremban Highway, Cheras-Kajang Highway, Kesas and MRR2. SUKE will provide a direct link between new growth centres such as Kajang, Segambut and Kepong and save 50 minutes of travel time between the two points on the MRR2. Once completed, traffic is expected to reduce on the MRR2 by 24% and Jalan Ampang by 36%. (Star)

Prime Minister Datuk Seri Najib Tun Razak announces RM200m facilitation fund for the Danga Waterfront Development project. The project stretches 25km from the eastern to the western sides of the Johor Causeway and will be launched in phases over 25 years with a gross development value of RM80bn. The project will be a public-private partnership involving the government and Iskandar Waterfront Holdings. (Bernama)

Malaysian rubber prices are likely to be higher this week on concerns over tight supply dealers said. Although the local market would take the cue from regional bearish futures markets, due to falling oil prices, limited supply from major producing countries would support prices. (Bernama)

Furniture makers and exporters are urging the Government to take steps to resolve the sector's labour shortage, which is said to be limiting growth for the industry. "We have to be selective where customers are concerned as we cannot meet demand. We need more foreign workers," said DPS Resources executive chairman Datuk Peter Sow. (Starbiz)

Mahajaya has received a notice of conditional takeover from a group of join-offerors, made up from its major shareholders, to acquire the remaining 75.56m shares representing a 27.57% stake they do not own in the company at 85 sen each. The offer valued the whole of Mahajaya at RM232.9m. (The Edge)

AirAsia, MAS: AirAsia CFO resigns to join MAS
AirAsia’s deputy group CEO Datuk Kamaruddin Meranun will be re-designated as deputy group CEO and president of group finance, treasury, corporate finance and legal with effect from Feb 13. The low-cost carrier also announced the resignation of its CFO Rozman Omar. The statement said Rozman would be stepping down as AirAsia’s regional head of finance with effect from Feb 13 to join MAS. (Starbiz, Financial Daily)

MBSB: To be privatised?
Reliable sources said EPF is considering to privatise Malaysia Building Society (MBSB) as it intends to do much more with the residual properties of the non-bank lender. A source said the EPF is looking to unlock the values in the properties that MBSB has. Based on MBSB's 2010 annual report, the company has 9.21 hectares (ha) in central Johor Baru and another 16.9 ha in Malacca. These pieces of land carry a book value of some RM169.2m. Besides that, MBSB also has a few pieces of land in Sungai Buloh with a combined area of 5.73 ha and a book value of RM31.9m. These properties were inherited by MBSB as many of its delinquent loans of the past were backed by properties in good locations. (Starbiz)

SP Setia: Joint offerors seek SC nod
The  joint offerors for SP Setia, namely Permodalan Nasional Bhd (PNB) and SP Setia's president and CEO Tan Sri Liew Kee Sin, have applied to the SC for a ruling in respect to the concert-party relationship of the joint offerors. Maybank Investment Bank said in a Bursa filing on behalf of the joint offerors that the document was despatched to the SC on Jan 25 and that the decision was still pending. (Starbiz)

Bursa Malaysia: High frequency trading soon
Bursa Malaysia is gearing up its regulatory infrastructure and hardware to deal with the new style of trading the stock and derivatives market amongst hedge funds called high-frequency trading. The stock exchange operator had last year introduced and allowed high-frequency trading on the derivatives market. Observers said this style of trading will be allowed on the stock exchange sooner or later following the continual evolution of markets in this new era of technology. (Starbiz)

Alam Maritim: Expects to return to the black due to higher average utilization rate
Alam Maritim Resources expects to return to the black in FY2011 due to higher average utilization rate and daily charter rate for offshore support vessels (OSVs) business segment. MD and CEO Azmi Ahmad said the average vessel utilization rate in FY2011 was close to 80% compared with 65% in FY2010. He also said the company has seen the daily charter rates for OSVs stabilizing at between US$1.70 per brake horse power (bhp) and US$2.00 per bhp in 2011. (Starbiz)

Tan Chong Motor: To be fueled by Indochina expansion
Tan Chong Motor Holdings (TCMH) believes the group's investments within Indochina will result in better earnings contribution in the coming years, in tandem with economic growth in the region. The automotive group said that the region was expected to see rapid economic growth resulting in rising purchasing power. Coupled with the region's large population and current  low car ownership of less than 8  cars per 1,000 population, they group see tremendous opportunities from local demand, especially as the population shifts from twowheelers to 4-wheel vehicles. (Starbiz)

Time Engineering: Khazanah has 3 bidders for Time Engineering
Khazanah Nasional is in the process of evaluating 3 potential buyers for its 45.03% stake in Time Engineering (TEB). It is understood that the 3 bidders are ICT Consultancy Zamcorp, IT solutions company MM Tech Corp, and an entity linked to prominent businessman Tan Sri Syed Mokhtar Al-Bukhary. A source said that the 3 were recently asked to submit their proposed business plan for TEB, including their offer price. The offers are generally at a slight premium to the stock’s current trading levels, though there are parties reluctant to pay more than the net asset value. (The Edge Weekly)

20120213 0948 Global Market Related News.

Asian Stocks, U.S. Futures Rally as Greece Lawmakers Approve Budget Cuts (Source: Bloomberg)
Asian stocks and U.S. futures climbed after the Greek parliament approved austerity measures to secure a second bailout package, helping the nation to avoid a debt default. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, gained 1.3 percent in Tokyo. Nitto Denko Corp. rose 4.8 percent as Nomura Holdings Inc. upgraded its rating on the electronics parts maker’s shares. Fortescue Metals Group Ltd. gained 3.8 percent in Sydney amid a report Canada’s Teck Resources Ltd. has acquired a stake in the iron-ore producer. The MSCI Asia Pacific Index rose 0.2 percent to 125.1 at 9:41 a.m. in Tokyo after falling 1.4 percent at the end of last week. Futures on the Standard & Poor’s 500 Index rose 0.4 percent, indicating the gauge may rebound from its first weekly decline in six. Japan’s Nikkei 225 Stock Average gained 0.4 percent and Australia’s S&P/ASX 200 Index rose 0.2 percent.

Japanese Stocks Advance After Greek Austerity Vote Outweighs Drop in GDP (Source: Bloomberg)
Japanese stocks climbed as the Greek parliament approved austerity measures needed to secure a debt bailout, outweighing a report that Japan’s economy contracted more than expected. The Nikkei 225 Stock Average rose 0.3 percent to 8,976.88 as of 9:12 a.m. in Tokyo. The broader Topix Index added 0.2 percent to 780.51 after swinging between losses of as much as 0.2 percent and gains of as much as 0.3 percent.

Retail Sales in U.S. Probably Rose by Most in Four Months on Automobiles (Source: Bloomberg)
Sales at U.S. retailers probably increased in January by the most in four months, spurred by the biggest gain in auto purchases since 2009, economists said before a report this week. The projected 0.8 percent gain in retail receipts would follow a 0.1 percent advance in December, according to the median forecast of 65 economists surveyed by Bloomberg News before Commerce Department figures on Feb. 14. Industrial production jumped and the cost of living increased in January, other data may show. The drop in unemployment to a three-year low is evidence of an improving job market that’s essential to sustaining purchases, which account for about 70 percent of the world’s largest economy. Gains in consumer and business spending and the need to replenish inventories are bolstering production at a time when Europe’s slowdown poses a risk for factories.

Lew Says Infrastructure Spending Still Needed to Keep U.S. Economy Growing (Source: Bloomberg)
White House Chief of Staff Jack Lew said hundreds of billions of dollars in spending for roads and bridges, education and manufacturing are necessary to keep the U.S. economy growing. “Most Americans understand that a crumbling infrastructure is not the way to build an economy that can last,” Lew, the former White House budget director, said on CNN’s “State of the Union” program. “We need to make sure we have a manufacturing base in this country” and workers with appropriate skills. Election-year sparring over the budget begins tomorrow as President Barack Obama submits the fourth spending blueprint of his presidency, a multitrillion-dollar package that calls for $350 billion in short-term spending to create jobs and a $476 billion, six-year highway bill, while saying it will cut $4 trillion from the deficit over a decade, partly by raising taxes on the wealthy.

Consumer Sentiment Falls More Than Forecast (Source: Bloomberg)
Confidence among U.S. consumers declined more than forecast in February as growing optimism about job prospects failed to ease concern wages will stagnate. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment dropped to 72.5 from 75 in January, a one-year high. The median estimate in a Bloomberg News survey called for 74.8. Another report showed the nation’s trade gap widened in December. A 22-cent increase in the price of a gallon of gasoline this year is pinching household finances, serving as a reminder that the pickup in hiring has yet to boost incomes. Consumer spending may hold up as the report showed more Americans believed the jobless rate will drop than at any time in the past three decades.

Bernanke Says Housing Market Holds Back Fed Efforts to Boost U.S. Economy (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the central bank’s efforts to spur economic growth are being blunted by impediments to mortgage lending, and he called for further steps to heal the housing market. “We have helped lower mortgage rates to the lowest point in many, many decades,” Bernanke told homebuilders today in Orlando, Florida. “Yet we are not seeing as much activity as we would like to see.” Bernanke, who repeated that the pace of the recovery has been “frustratingly slow,” didn’t discuss the outlook for monetary policy. He devoted part of his speech to recommendations from a Fed study on housing that was sent to Congress last month and which prompted criticism from some lawmakers, who said the Fed has overstepped its authority.

China Should Fine-Tune Policy Early as Q1: Wen (Source: Bloomberg)
Chinese Premier Wen Jiabao said the nation should take preemptive measures and start “fine-tuning” economic policies as early as in the first quarter, according to Xinhua News Agency. Economic conditions in January and the first quarter deserve attention, Wen told business executives last week in Beijing as he sought opinions on a government report, the official news agency reported yesterday. “We have to make a proper judgment as early as possible when things happen and take quick action,” Wen was cited as saying by Xinhua. China’s exports and imports fell for the first time in two years in January and lending grew less than estimated, adding to signs growth is weakening in the world’s second-largest economy. The nation’s expansion may be cut almost in half if Europe’s debt crisis worsens, a scenario that would warrant “significant” fiscal stimulus from the government, the International Monetary Fund said in a Feb. 6 report.

Consumer Confidence Increases as China and U.S. Rise, Nielsen Survey Shows (Source: Bloomberg)
Global consumer confidence rose in the December quarter as improving sentiment in the U.S. and China, the world’s largest economies, outweighed deterioration in Europe, according to a survey by Nielsen Holdings NV (NLSN). Nielsen, an analytics and information company, said yesterday its index of consumer confidence rose one point in the period to 89. The company surveyed more than 28,000 online consumers in 56 countries from Nov. 23 to Dec. 9 with sentiment falling compared to the September quarter in 30 of those markets, according to an e-mailed statement. North America posted the biggest regional gain, rising five points to 84 in the period, as measures for personal finance and employment improved. The Asia-Pacific region remains the most optimistic, with seven of the 10 highest scores, while 24 of the 27 markets in Europe posted declines in the quarter.

Japan’s Economy Shrinks More Than Forecast (Source: Bloomberg)
Japan’s economy contracted more than economists forecast in the fourth quarter as exports slid on weakness in global demand and strength in the yen. Gross domestic product shrank an annualized 2.3 percent in the three months ended Dec. 31, following a revised 7 percent expansion in the previous quarter, the Cabinet Office said today in Tokyo. The median forecast of 26 economists surveyed by Bloomberg News was for a 1.3 percent decline. A pick-up in earthquake reconstruction work may aid a return to growth this quarter even as gains in the currency pare export earnings, worsening losses for companies such as Sony Corp. (6758) The Bank of Japan may refrain from additional easing tomorrow as officials assess a mixed global picture, from improved U.S. employment to weaker Chinese trade and Europe’s progress in taming its debt crisis, according to a Bloomberg News survey of economists.

Japan Earnings Gloom Fades as Stocks Rally (Source: Bloomberg)
Panasonic Corp. (6752) had its best week in more than two years of Tokyo trading, following its forecast for a record $10 billion loss, showing some investors are betting Japan’s biggest exporters have hit bottom. Sony Corp. (6758) had its biggest weekly gain in more than three months, after more than doubling its net loss forecast to 220 billion yen ($2.8 billion) for this fiscal year, the most since listing in 1958. Toyota Motor Corp. (7203), which expects less than half as much profit this year as last, surged 5.6 percent, the biggest gain in more than two months.
The rally signals investors expect the nation’s exporters of cars, televisions, phones and chips to bounce back after a year that combined the worst earthquake in Japan’s history, a months-long flood in Thailand that disrupted output and a currency that’s surged to a postwar high. The catastrophes and yen gains are being offset as investors bet a broader rise in global trade will allow Japan’s exporters to revive profit, said Nicholas Smith, a Japan strategist at CLSA Asia-Pacific Markets Ltd.

Papademos Has Votes to Win Austerity Motion (Source: Bloomberg)
Greek Prime Minister Lucas Papademos won parliamentary approval for austerity measures to secure an international bailout after rioters protesting the measures battled police and set fire to buildings in downtown Athens. A total of 199 lawmakers voted in favor and 74 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV. When, on Nov. 16, Papademos won a mandate from the Parliament to implement budget measures and secure the bailout of 130 billion euros ($172 billion) he received the support of 255 lawmakers in the 300-strong chamber. “It is up to us, our vote, whether the country will remain in the euro or be led to a disorderly default,” Papademos told parliament. “Voting for the economic program and opening the road for a loan accord sets the basis for the modernization and recovery of the economy.”

Papademos Gets Cabinet Approval for 2nd Bailout (Source: Bloomberg)
Greek Prime Minister Lucas Papademos won Cabinet approval for deeper budget cuts needed to secure a second package of international aid, preparing the way for parliamentary vote in his race to prevent financial collapse. The 287-page document was approved unanimously, said a government official who declined to be named. The backing means parliament will probably vote tomorrow on budget measures equal to 7 percent of gross domestic product over the next three years and a debt swap to cut 100 billion euros ($132 billion) off more than 200 billion euros of privately-held debt. “The social cost this program implies will be limited compared to the economic and social catastrophe that would follow if we don’t adopt it,” Papademos told his ministers earlier, according to a transcript of his comments. “The completion of the program and financial support will cement our country’s future in the euro area.”

Euro Gains After Greek Parliament Approves Austerity Measures for Bailout (Source: Bloomberg)
The euro strengthened after Greek Prime Minister Lucas Papademos won approval from parliament for austerity measures to secure a second package of aid from the European Union and International Monetary Fund. The 17-nation currency rose against most major peers after Parliament Speaker Filippos Petsalnikos said in remarks carried on state-run Vouli TV that a total of 199 lawmakers voted in favor of the measure. The dollar slid versus 12 of its 16 most- traded counterparts before data tomorrow forecast to show U.S. retail sales rose in January by the most in four months. The yen fell against the greenback after a report showed Japan’s economy contracted last quarter by more than economists had predicted.
The Greek vote “takes some of the downside out of euro for the short-term,” said Sacha Tihanyi, Hong Kong-based senior currency strategist at Scotiabank, a unit of Bank of Nova Scotia. “It certainly was helpful and positive for the currency. It probably induced some short-covering.” A short position is a bet that an asset will decline in value.

U.K. Inflation Probably Slowed to 14-Month Low in January, Economists Say (Source: Bloomberg)
U.K. inflation probably slowed in January to its weakest pace in more than a year as the impact of a sales-tax increase a year earlier faded and retailers cut prices to lure shoppers. Consumer prices rose an annual 3.6 percent after a 4.2 percent gain in December, the median forecast of 36 economists in a Bloomberg News survey showed. That’s the weakest since November 2010. The Office for National Statistics in London will publish the data at 9:30 a.m. on Feb. 14. A day later, the Bank of England will release new economic and inflation forecasts, which Governor Mervyn King will present at a press conference. The central bank said Feb. 9 it will pump another 50 billion pounds ($79 billion) into the economy, adding to the 275 billion pounds of bond purchases it has implemented since March 2009. The stimulus is aimed at preventing inflation falling below the bank’s 2 percent target amid what it says is a “weak outlook” for growth.

European Stocks Slide as Greeks Fail to Agree on Austerity Deal (Source: Bloomberg)
European stocks fell from a six month-high this past week, as Greece’s coalition government failed to agree on the remaining spending cuts needed to obtain financial aid from the European Union and stave off a default. Xstrata Plc (XTA) fell 6.6 percent as some investors opposed Glencore International Plc’s $39 billion takeover proposal. Credit Suisse Group AG (CSGN) sank 8.1 percent after posting a loss when analysts had predicted a profit. Vestas Wind Systems A/S (VWS) dropped 23 percent as the wind-turbine maker reported a full- year loss four times wider than analysts had forecast. The Stoxx Europe 600 Index fell 1.3 percent to 261.24 this week, retreating from its highest level since July 29. The benchmark measure has still rallied 22 percent from its two-year low on Sept. 22 and 6.8 percent from the start of this year as the European Central Bank lent 489 billion euros ($645 billion) to banks and investors speculated that the currency area would contain its sovereign-debt crisis.

20120213 0947 Global Commodities Related News.

Speculators Raise Bullish Wagers to Highest Since September: Commodities (Source: Bloomberg)
Hedge funds increased bets on rising commodity prices to the highest since September on mounting confidence that growth in the U.S. will strengthen demand. Money managers boosted their combined net-long positions across 18 U.S. futures and options by 13 percent to 929,199 contracts in the week ended Feb. 7, Commodity Futures Trading Commission data show. That’s the highest since Sept. 20. Bullish wagers on copper rose to a six-month high, and soybean holdings jumped by the most this year. The Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 commodities rose to a six-month high on Feb. 9, a day after the MSCI All- Country World Index (MXWD) entered a bull market, as indicators signaled accelerating growth. Fewer Americans than forecast filed claims for jobless benefits in the week to Feb. 4, and consumer confidence rose to a one-year high. Investments in commodities expanded for a seventh week, the longest streak since February 2009, data compiled by Bloomberg show.

Corn (Source: CME)
US corn futures end lower amid broad-based commodity losses and lingering pressure from Thursday's USDA report. A stronger dollar and weaker equities as Europe debt worries escalated weighed on commodities generally. Corn in particular was pressured by Thursday's USDA report. While the report was considered neutral, the market's inability to push above its trading range over the past month is considered a negative sign, which has prompted selling, including from farmers, traders say. The market could stay rangebound until a clearer picture of US planting emerges, traders add. CBOT March corn ends down 5 1/4c to $6.31 3/4 per bushel.

Wheat (Source: CME)
US wheat futures stumble again, ending lower on broad commodity pressure and ample world supplies. A stronger dollar and worries about Europe's economy weigh on commodities generally, and wheat in particular has had added pressure from Thursday's USDA report, which showed world stockpiles climbing to record highs. That mitigates any concerns about a potential decline in exports from the Black Sea. CBOT March wheat ends down 16c to $6.30/bushel, KCBT March falls 19c to $6.73 and MGEX March slides 17 1/2c to $8.14 1/4.

Rice (Source: CME)
US rice futures end sharply lower on broad commodity pressure and poor demand. Rice prices pressured after USDA Thursday again cut its demand outlook for US rice. World supplies are also considered adequate. A stronger dollar weighed on commodities generally. Prices remain above a Feb. 1 intraday low of $13.50. CBOT March rice ends down 36 1/2c to $13.71 1/2 per hundredweight.

Wheat near 2-week low; corn, soy fall on crop data
SINGAPORE, Feb 10 (Reuters) - Chicago wheat slid almost 1 percent, falling for a fourth straight session and touching its lowest in almost two weeks, as record-large global supplies forecast by the U.S. government pressured the market.
"Going forward, we see more downside for corn as U.S plantings will be higher which will pressure prices in the coming weeks," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Record world wheat stocks to offset S.America drought
WASHINGTON, Feb 9 (Reuters) - World wheat stocks will swell to a record this year and corn supplies will be larger than expected despite a crop-withering drought in South America, the U.S. government forecast on Thursday.
India will post a record rice crop of 102 million tonnes, up 2 million tonnes from a January estimate, due to beneficial monsoons and growing weather, the U.S. Department of Agriculture forecast, as the global grain outlook improves slightly after years of tight stocks and rising prices.

Argentine corn crop seen smaller due to drought
BUENOS AIRES, Feb 9 (Reuters) - Weeks of drought in Argentina caused irreversible damage to corn plants in the world's No. 2 exporter, prompting the Buenos Aires Grains Exchange to cut its 2011/12 crop estimate on Thursday.
The exchange dropped its forecast to 21.3 million tonnes from an earlier 22 million tonnes, saying recent rains that have benefited many parts of the grains belt came too late to help fields hardest hit by December and early January dryness exacerbated by an unforgiving Southern Hemisphere summer sun.

India 2011/12 rice, wheat output revised up-attache
Feb. 9 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in India:
"On February 3, 2012, the Ministry of Agriculture released the 'Second Advance Estimate for the Indian Crop Year 2011-12', forecasting record food grain production for a second consecutive year at 250.4 million tonnes. MOA also raised the 2010/11 final food grain production estimate to a record 244.8 million tonnes.
Consequently, the MY 2011/12 rice and wheat production forecasts are raised to 102 million tonnes and 86.87 million tonnes, respectively, and the MY 2010/11 rice production forecast is raised to 95.98 million tonnes. This rapid update is due to the release of the new official statistics which were not available when the last update was submitted on February 2, 2012."

Ukraine asks traders to export corn, not wheat
KIEV, Feb 9 (Reuters) - Ukraine's Farm Ministry has asked grain traders to focus their activity on exports of maize and barley but not on wheat, Interfax Ukraine news agency quoted a ministry official as saying on Thursday.
"We encourage traders ... do not include it (wheat) in the list of priorities. As for barley and maize, you are welcome to," said Serhiy Kvasha, the head of the ministry's market department.

La Nina to fade, but impact may hurt farmers
Feb 9 (Reuters) - The La Nina weather pattern will likely dissipate this spring but farmers in the southern United States and South America will have to contend with lingering dryness as they plant corn, soybeans, cotton and coffee.
The U.S. Climate Prediction Center (CPC) said in its monthly update on Thursday that computer models favor "a return to neutral conditions during the Northern Hemisphere spring, which are likely to continue into the summer."

Drought cuts S.America crops more-USDA
WASHINGTON, Feb 9 (Reuters) - Drought severely stunted South America's corn and soybean crops although not quite as badly as feared, the U.S. government said on Thursday, foreseeing larger U.S. corn exports to fill the gap.
The U.S. corn stockpile would shrink to its smallest size in 16 years this year, down 5 percent from the previous forecast but still slightly better than traders had anticipated,  the Agriculture Department said in its montly crop forecast.

Wheat Slumps Most in Four Weeks on Outlook for Adequate Global Supplies (Source: Bloomberg)
Wheat fell the most in four weeks after the U.S. government yesterday projected record world stockpiles, easing concerns that food prices will rise and weather damage will cut supply. Global stockpiles before the 2012 Northern Hemisphere harvest will climb to 213.1 million metric tons, 6.2 percent more than last year, the Department of Agriculture said. World food costs are down 9.9 percent from a record last year, United Nations data show. Wheat prices fell 4.7 percent this week, after jumping 11 percent in the second half of January on concern extremely cold weather would hurt crops in Europe. Supplies are “more than adequate,” Jon Marcus, the president of Lakefront Futures and Options LLC in Chicago, said in a telephone interview. “You’ll see prices continue to drag, at least in the short run. There’s plenty around, so it’s not a concern.”

Ukraine Asks Traders to Limit Wheat Exports Due to Weather (Source: Bloomberg)
Ukraine asked grain traders to limit wheat exports after drought and frosts damaged the winter crop, Volodymyr Klymenko, head of the country’s Grain Association said. “The ministry asked us not to sign too many contracts for wheat,” Klymenko said in an interview from Kiev today. The former Soviet state will have to replant almost half of its winter grains with spring crops, Prime Minister Mykola Azarov said today, according to a statement on the government’s website. “We had severe frosts in January and we will have to re-sow 3.5 million hectares (8.6 million acres) with spring grains,” he said. Ukraine’s Agriculture Ministry estimated about 8.4 million hectares of winter grains, most of which was wheat, was planted for the 2012 harvest. About 1.84 million hectares, of 7.2 million hectares which sprouted, were in good condition, the ministry said yesterday.

Australian Floods Continue To Hamper Agriculture Sector Activity (Source: CME)
Widespread flooding in northern New South Wales and Queensland states is hampering the movement of livestock and curbing cattle supply in saleyards, with more rainfall forecast, marketing concern Meat & Livestock Australia Ltd. said. In Queensland, which accounts for about half of Australia's beef production, cattle sales were concentrated in the southeastern corner of the state, as most other physical markets were canceled this week due to flooding, the MLA said in a weekly report. The effects of localized flooding and waterlogged paddocks lingered in parts of northern New South Wales, where saleyard throughput was also restricted, it said. Meanwhile, Cotton Australia estimated Thursday that damage from the floods could cut output from the crop to be stripped in the coming months by about 10%, to around 1.02 million metric tons, a loss that the lobby group's Chief Executive Adam Kay estimated would cost the industry about A$250 million.
In a preliminary estimate this week, the New South Wales Department of Primary Industries said the floods would likely lead to losses totaling A$750 million--from damage to crops, infrastructure and livestock. The farmers in much of northern New South Wales are suffering the effects of a second flood in the past several months after a harvest of ripe winter crops late in 2011 was delayed and damaged, while Queensland farmers are experiencing their third major flood in two years. While the floods are easing in some areas, the MLA reported that wet conditions continued in eastern Australia this past week. "After weeks of solid rain, many towns throughout this region have experienced a record wet summer, with further rainfall forecast for the next seven days," it said in a statement. These latest rains come after what the Bureau of Meteorology said this week was Australia's "wettest two-year period on record" in 2010 and 2011.
Back-to-back La Nina events resulted in a two-year average rainfall across Australia for 2010 and 2011 of 1409 millimeters, surpassing the old record of 1407 millimeters set in 1973 and 1974, the bureau said. Some of the heaviest rains in 2010 and 2011 fell along the east coast, from Cape York to Sydney, with some areas receiving more than 3,600 millimeters in the period, while vast swathes of Queensland and northern New South Wales received falls in of 1,600-2,400 millimeters.

Cargill Continues To Supply Iran With Grains (Source: CME)
U.S.-based agribusiness giant Cargill plans to continue its grain shipments to Iran despite emerging signs the country is struggling with credit issues due to tightening sanctions, a spokesperson for the company said. "Cargill, like a variety of other multinational companies with a global agricultural footprint, does sell agricultural commodities to Iran as food is specifically excluded from the sanctions," the company said in an e-mailed statement to Dow Jones Newswires. Major European banks, including Rabobank, have halted trade finance for grain or any agricultural products bound for Iran. The European Union and U.S. have both introduced trade restrictions on the Central Bank of Iran to increase pressure on the Islamic Republic over its nuclear program. Cargill said that the agricultural commodities it sends to Iran are sourced "from around the world." Iran typically imports around 5 million metric tons of grain a year, most of which is corn.
"We take great care to ensure that these sales respect both the spirit and the letter of the law while trying to make sure that ordinary people are not deprived of basic foodstuffs," Cargill added. "From a food security standpoint, this is a potential unintended consequence of the sanctions," the company said. According to official port records, numerous vessels carrying foodstuffs have been waiting for several days to dock at Iranian ports, due to a "lack of readiness of cargo owners."

Vietnam's Jan coffee exports plunge, sales expected to pick up
HANOI, Feb 10 (Reuters) - Vietnam's coffee exports plunged nearly 48 percent in January from a year ago because of the Tet new year festival and as farmers held back beans in the expectation of higher prices later, but traders expect sales to pick up this month.  Customs data showed January coffee exports dropped to a little more than 112,000 tonnes, or 1.87 million 60-kg bags, from 215,000 tonnes in the same month last year. Last month's bean exports were also down 27.9 percent from December levels.

Colombia coffee exports, output fall in Jan -growers
BOGOTA, Feb 9 (Reuters) - Colombia's coffee production in January fell 41 percent from a year earlier to 535,000 60-kg bags due to the continued effects of heavy rains on the crop, the country's coffee federation said on Thursday.
The world's top producer of high-quality Arabica beans posted a third consecutive year of lower-than-expected coffee production in 2011 as bad weather, fungus and a tree renovation program keep output below historic averages of 11 million bags.

Better sugar, ethanol prices lift Brazil Cosan net
SAO PAULO, Feb 9 (Reuters) - Quarterly profit more than doubled at Brazil's largest sugar exporter, Cosan , as the company produced less sugar and ethanol but enjoyed better prices for its main products.
A surge in ethanol export revenue more than offset a decline in sales of the cane-based biofuel in the domestic market and a drop in sugar sales at home and abroad.

Australian coal exports seen up in 2012, prices to fall
PERTH, Feb 10 (Reuters) - Australian coal exports are forecast to jump 12 percent in 2012 as producers recover from floods in coal-producing regions in late 2010 and early 2011, but prices are forecast to slip due to weak demand and more supplies, a Reuters poll shows.
Total coal exports from Australia will increase to 313 million tonnes this year from 279 million tonnes in 2011, the poll of 17 analysts showed.

Euro Coal-Prices slip again, ice blocks Danube river
LONDON, Feb 9 (Reuters) - Freezing weather continued to drive up gas and power prices but coal values fell again because utilities have more coal than they need and stockpiles are close to full, utilities and traders said.
Gas and power demand has surged across Europe due to the severe cold weather, but utilities, traders and producers are offering very prompt cargoes of Russian and multi-origin coal and finding few buyers.

Oil Rises From Three-Day Low as Greek Lawmakers Pass Austerity Measures (Source: Bloomberg)
Oil advanced from a three-day low after Greece’s parliament approved austerity measures needed to secure an international bailout, easing concern that Europe’s debt crisis will worsen and curb commodity demand. Futures rose as much as 0.9 percent in New York as 199 lawmakers supported the bill in a roll-call vote shown live on state-run Vouli TV, compared with 74 who were opposed. The measures will allow the country to secure a 130 billion-euro ($172 billion) second aid package. European Union countries account for about 16 percent of the world’s oil demand, according to BP Plc’s Statistical Review of World Energy. “It’s a confidence builder in terms of Greece’s willingness to implement reform,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The market has made the adjustment it needed to make from being excessively pessimistic a few months ago and has now based itself on an assumption of moderate international growth.”

Brent drops below $118, China data stokes demand fears
SINGAPORE, Feb 10 (Reuters) - Brent crude slipped from a six-month high to below $118 a barrel as data from China showed a soaring trade surplus due to crumbling imports for January, stoking fears of a slowdown in demand from the world's second largest oil consumer.
"Demand has been affected by seasonal factors. We expect GDP growth to accelerate in China as the government implements more stimulatory measures, and this will be positive for oil demand," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.

China Sinopec raises 2012 term Saudi crude imports -sources
BEIJING, Feb 10 (Reuters) - China's Sinopec Corp  has agreed to increase Saudi crude oil imports under a 2012 term contract from last year's 800,000 barrels per day, Chinese industry officials told Reuters.
The term supply volume, which sources declined to specify, includes 240,000 bpd to Sinopec's refinery in eastern Fujian province, a joint venture with Saudi Aramco and ExxonMobil.

China Jan crude oil imports 3rd highest on record
BEIJING, Feb 10 (Reuters) - China's crude oil imports in January marked the third highest level on record, up 7.4 percent from a year earlier to 5.51 million barrels per day (bpd), customs data showed on Friday, as refineries ramped up to ensure supply ahead of a holiday season.
The world's second-largest oil consumer imported 23.41 million tonnes of crude oil last month, data published by the General Administration of Customs showed.

Holidays may mask record China crude oil imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own--
LAUNCESTON, Australia, Feb 10 (Reuters) - There was little doubt that the early week-long Lunar New Year holidays would distort China's crude oil import data for January, but the real surprise is that the break may be hiding record strength.
Imports totalled 5.51 million barrels a day, up 350,000 barrels a day on December despite the major Chinese annual holiday falling in January rather than February, as it has done for four of the last five years.

Copper Traders Turn Bullish as Inventories Drop to 2009 Low: Commodities (Source: Bloomberg)
Copper traders turned bullish for the first time in seven weeks on mounting confidence that global growth will strengthen, diminishing stockpiles after a year in which mine production fell by a record amount. Thirteen of 25 analysts surveyed by Bloomberg expect the metal to gain next week and three were neutral. Hedge funds and other money managers are holding their biggest bet on rising prices since early August, Commodity Futures Trading Commission data show. Inventories tracked by the London Metal Exchange are already at a two-year low after global mine output dropped by 200,000 metric tons in 2011, Barclays Capital estimates.
Investments (.CMDOI) in commodities expanded at the quickest pace in six years in January on increasing confidence economies will skirt another recession, data compiled by Bloomberg show. Higher demand comes at a time when producers are struggling to keep up, as lower ore grades, strikes and slower-than-expected mine developments limit supply growth. Barclays anticipates a third consecutive copper shortage in 2012 and another one next year.

Iron Ore-Spot extends losses on listless China steel market
SINGAPORE, Feb 10 (Reuters) - Spot iron ore fell to its lowest price in more than a week and sellers slashed offer prices further on Friday as demand from top buyer China remained thin.
Slow steel demand in China, the world's biggest producer and consumer, has weighed on prices, limiting appetite for iron ore with imports in January falling more than 7 percent from December.

China January iron ore imports down 7 pct from Dec-customs
SHANGHAI/BEIJING, Feb 10 (Reuters) - China imported 59.32 million tonnes of iron ore in January, down 7 percent from 64.09 million tonnes for the previous month, official data from China's customs authority showed on Friday.
The world's largest iron ore consumer slowed down on shipments during the one-week Lunar New Year holiday at the end of January, after the country purchased a record of around 686 million tonnes of the steelmaking raw material in 2011.

India iron ore exports to recover to below highs
NEW DELHI, Feb 8 (Reuters) - India's iron ore exports will recover from this year's depressed levels but will not rise above 100 million tonnes, the country's mining secretary said, as a crackdown on illegal sales pays off.
Vishwapati Trivedi said stricter controls of mining were helping determine the "natural level" of export - his euphemism for legal sales - in the long run from the world's third biggest supplier, whose major customer is China.

Credit squeeze threat to shipping industry-survey
LONDON, Feb 10 (Reuters) - Tighter bank financing is the big threat to shipping companies, and many are looking at alternative sources of funding such as private equity to fill gaps amid a worsening credit squeeze, a transport survey showed on Friday.
In the survey by international law firm Norton Rose, 42 percent of respondents said a lack of finance was the greatest threat to their businesses.

20120213 0947 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures ended with modest gains, breaking a three-day string of losses. Market managed to rebound from declines that held for most of the day, with buying emerging near the close as traders covered shorts ahead of the weekend, analysts say. Lingering worries about crop potential in southern Brazil and unwinding of long corn/short soybean spreads aided the recovery, analysts add. Traders say soy prices must gain against corn to attract acreage this year. CBOT March soybeans ended up 1 1/2c to $12.29/bushel.

Soybean Meal/Oil (Source: CME)
Soy-product futures end mostly lower, succumbing to broader commodity weakness in the absence of fresh supportive news. Soyoil continued to before better versus soyoil as traders are optimistic about world vegoil demand. CBOT March soyoil fell 0.01c to 52.53c/pound while March soymeal dropped $1 to $320/short ton.

Palm oil inches down on bearish U.S. crop report
SINGAPORE, Feb 10 (Reuters) - Malaysian crude palm oil fell on the back of a bearish U.S. crop report and prospects of slowing demand indicated by export trends, although losses were capped by a long-awaited Greece deal which helped allay fears of an immediate default.
"The market's a little bearish because it expects a steeper production drop in South American crop," said a dealer with a foreign commodities brokerage in Kuala Lumpur.

Malaysia's Jan palm oil stocks fall to five-month low
KUALA LUMPUR, Feb 10 (Reuters) - Malaysia's January palm oil stocks slipped to a five-month low as a decline in production outpaced a drop in exports, industry regulator Malaysian Palm Oil Board said on Friday.
Stocks in the world's No. 2 producer of the edible oil fell 2.5 percent to 2.0 million tonnes from December last year, almost matching market expectations of a 2.2 percent drop.

China Jan soy imports down 15 pct vs Dec - customs
BEIJING, Feb 10 (Reuters) - China, the world's top soy buyer, imported 4.61 million tonnes of the oilseed in January, down 15 percent from 5.42 million tonnes in December, as crushers reduced imports during a holiday shutdown, figures from the General Administration of Customs of China showed on Friday.
On an annual basis, soy imports fell 10.2 percent in January, largely due to seasonal factors as the Lunar New Year fell in January this year but in February last year. Soy plants across the country typically close during the week-long holiday.

Brazil soy crop view wilts but corn rises - gov't
SAO PAULO, Feb 9 (Reuters) - Brazil's government pared back its forecast for soy production on Thursday as drought over the southern grain belt took its toll on yields, but it raised the estimate for corn, expecting winter planting to jump in the coming weeks.
The fifth forecast of the 2011/2012 grain crop by the Agriculture Ministry's supply agency Conab comes after drought over southern Brazil and Argentina raised fears of a sharp drop in output. Combined, the two nations produce more soybeans - an important global source of protein and vegetable oils- than the United States, the largest single producer.

India's Jan palm, soy oil imports seen up
NEW DELHI, Feb 10 (Reuters) - India's palm oil imports may have risen in January over the previous month as domestic supplies run out, a Reuters survey showed on Friday, but the imports could fall this month with start of the rapeseed harvest season.
Palm oil imports -- the bulk of India's edible oil purchases -- rose 3.1 percent last month to 569,750 tonnes, according to the survey of eight traders, with soyoil imports seen up 360.3 percent to 34,000 tonnes over December.