Tuesday, February 14, 2012

20120214 1810 FCPO EOD Daily Chart Study.

FCPO closed : 3205, changed : +37 points, volume : higher.
Bollinger band reading : correction range little downside biased.
MACD Histrogram : rising, buyer taking exposure.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded gains with better volume participation. Soy oil price currently trading little lower after overnight closed rallied higher while crude oil price managed to break above 100 per barrel and trading firmer.
Crude palm oil futures price rallied higher after soy oil price lifted higher due to weaker U.S. Dollar and stressful weather returning to southern Brazil while market also awaits tomorrow export data by 2 cargo surveyors.
Technical reading adjusted to suggesting a correction range bound little downside biased market development with MACD indicator having positive crosses up.
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.

20120214 1730 FKLI EOD Daily Chart Study.

FKLI closed : 1559.5, changed : +1 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : rising, buyer in control.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed marginally higher with drying out volume transacted doing 6.5 points discount compare to cash market that closed also little higher. Overnight U.S. markets closed higher and today Asia markets having mixed development while European markets also trading indecisively.
Global market reacted differently after news on 6 European countries downgraded by Moody's investors services, Bank of Japan expands stimulus measure and awaits Greece bailout package development.
Chart reading still 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.

20120214 1713 Regional Markets EOD Daily Chart Study.

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

20120214 1654 Global Market & Commodities Related News.

Markets dip as Moody's takes shine off Greek relief
TOKYO, Feb 14 (Reuters) - Shares and the euro fell  after Moody's warned it could downgrade top-rated sovereigns including Britain, reminding investors that Europe is still deeply mired in a debt crisis despite Athens' steps to avoid a disorderly default.  
"Asian markets actually followed the news about downgrades in those European countries, as markets realised there is no resolution yet and revived worries over the European problem," said Frances Cheung, senior strategist for Asia ex-Japan at Credit Agricole CIB in Hong Kong.

FOREX-Yen falls as BOJ expands asset buying scheme
SINGAPORE, Feb 14 (Reuters) - The yen fell broadly on Tuesday as the Bank of Japan eased monetary policy by expanding its asset buying scheme and defined 1 percent consumer inflation as a near-term goal.  
The BOJ boosted its asset buying and lending scheme by 10 trillion yen ($130 billion), to 65 trillion yen, with the entire increase to be used for purchases of long-term Japanese government bonds (JGBs).

Wheat dips on Australia's output forecast, soy steady
SINGAPORE, Feb 14 (Reuters) - U.S. wheat slid around half a percent  falling for a fifth time in six sessions, as forecasts of crop-friendly weather in the U.S. Plains and Australia's estimate of a record large harvest weighed on the market.
"It is a massive output. Australia will be competing in the world market through the end of the year even when the other origins come in," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne, referring to Australia's wheat production forecast.

Australia lifts winter wheat crop f'cst to record 29.5 mln T
SYDNEY, Feb 14 (Reuters) - Australia on Tuesday lifted its forecast for wheat production this year by 4.2 percent to a record 29.5 million tonnes from 28.3 million previously, saying key growing regions completed harvesting before the onset of heavy rains.
Wheat exports were also revised up 3.2 percent to 22.3 million tonnes from 21.6 million previously, the Australian Bureau of Agricultural and Resource Economics and Sciences  said in its latest crop report.

Canada crop belt bracing for drought
WINNIPEG, Manitoba, Feb 13 (Reuters) - Of Glen Franklin's 640 acres, only the hilltops were sown with crops last year as melting snow created an inland sea across southwestern Manitoba and southeastern Saskatchewan.
But this year, the fertile Canadian Prairies are parched, promising an easier planting season this spring, but raising doubts about the eventual size of the region's prized grain and oilseed harvest.

USDA sees US corn stocks double next year
Feb 13 (Reuters) - A U.S. government report on Monday showed farmers in the United States will plant the largest area with corn this spring since World War Two, which could double the razer-thin stocks of this year and help defray costs to consumers and food companies.
The U.S. Department of Agriculture's baseline projections -- the first of a series of estimates that will help shape prices across the globe -- pegged corn acres at 94 million, the most since 1944 and near trade expectations for 94.2 million.

Patchy downpour keeps mix outlook for Ivorian cocoa
ABIDJAN, Feb 13 (Reuters) - Irregular rainfall punctuated by hot weather last week in most of Ivory Coast's principal cocoa-growing regions left farmers uncertain over the development of their crops ahead of the April-September mid-crop harvest, farmers said on Monday.
Except for the coastal regions where some downpours were reported, farmers in other cocoa-growing regions said they were worried by the lack of regular rains needed in this crucial period to strengthen trees to produce new foliage for flowering.
Early rains brings relief to Cameroon cocoa farmers
YAOUNDE, Feb 13 (Reuters) - Farmers in Cameroon's main cocoa growing regions said on Monday that abundant rains in the past week have raised hopes of a better mid-crop harvest after a long dry spell coupled with pests attacks that threatened crop output.
Farmers in the Centre and South West regions of the world's fifth largest producer said the rains have enabled flowers to grow on trees and blossom, signalling a potential bumper crop.

Ukraine grain exports at 335,000 T Feb 1-9
KIEV, Feb 13 (Reuters) - Ukraine exported about 335,000 tonnes of grain, mostly maize, in the first nine days of February, Kiev-based ProAgro consultancy said on Monday, citing data from Ukrainian sea ports.
ProAgro said Ukraine had exported about 287,000 tonnes of maize and 40,500 tonnes of wheat. No figures for the same period of 2011 were immediately available.

Brent slips towards $116 on euro zone concern, Iran supports
SINGAPORE, Feb 14 (Reuters) - Brent crude futures slipped towards $116, pushed by demand growth concerns in Europe after ratings agency Moody's downgraded six countries in the region, but fears of supply disruption helped stem the slide.  
"Worries remain on the supply of crude in the Middle East, which should be built into Brent," said Tony Nunan, a risk manager with Mitsubishi Corp in Tokyo. "The worsening of the situation in Iran or Syria could cause a shift in Brent prices."

Iran iron ore, bulk trade slides as sanctions bite
LONDON, Feb 13 (Reuters) - Iron ore traders and dry bulk ship owners in Europe are pulling back from deals with Iran, worried they could miss out on vital future U.S. business as Western sanctions heap pressure on the Islamic Republic, trade sources say.
U.S. financial sanctions imposed since the beginning of this year to punish Tehran over its nuclear programme are playing havoc with its ability to buy imports and receive payment for its exports.

Brazil steel mills seen posting mixed earnings
SAO PAULO, Feb 13 (Reuters) - High inventory and weak demand that pushed domestic prices lower likely hampered fourth-quarter earnings for the largest listed Brazilian steelmakers, a Reuters poll of analysts showed on Monday.
Brazil's steel industry is suffering through its worst crisis in years, hurt by rising costs of raw materials and soft demand in Latin America's largest economy.

Copper firm on Greece deal; China buyers still out
SHANGHAI, Feb 14 (Reuters) - London copper steadied  after a two-session losing streak, as investors cautiously welcomed Greece's approval of harsh austerity measures, but traders noted scant buying from top consumer China.
"You've seen a decent fall in prices in the last few days," he said. "It's getting a little more attractive for Chinese purchases, although it's still bit high for them to leap in with both feet."

European copper premiums up, demand worry remains
LONDON, Feb 13 (Reuters) - Premiums for physical copper in Europe have firmed in recent weeks, but traders say demand for the metal used in power and construction remains weak due to the region's economic downturn.
Premiums - the amount paid over and above the London Metal Exchange cash price to secure physical delivery of a metal - for Grade A copper on the spot market in Rotterdam are currently at around $50-75 a tonne from $40-60 at the end of January.  

Zambia 2011 copper output eclipses 2010
LUSAKA, Feb 13 (Reuters) - Copper production in Zambia, Africa's top producer of the metal, rose to 869,058 tonnes in 2011 from 852,566 tonnes the previous year, the central bank said on Monday.
Exports between January and December also rose to 876,555 tonnes from 829,726 tonnes the previous year, the central bank said in a fortnightly statistics report.

Gold dips with euro on Greece jitters
SINGAPORE, Feb 14 (Reuters) - Gold edged lower  , tracking a weaker euro, as wary investors focused on whether Greece will be able to convince Europe to grant a much-needed bailout and implement unpopular reforms.
Gold greeted the passage of tough reform and austerity "There is a big question mark on implemention of all the measures, because the track record of Greece is so bad," said Dominic Schnider, head of commodity research at UBS Wealth Management.

Shanghai Gold Exchange eyes OTC trading
SHANGHAI, Feb 13 (Reuters) - The Shanghai Gold Exchange (SGE) plans to launch over-the-counter gold trading and is in talks with the China Foreign Exchange Trade System to conduct these trades via the interbank market, an official from the exchange said on Monday.
The exchange also has plans to start exchange-traded-funds (ETFs) for gold to tap rising demand in China. It was also considering rolling out palladium contracts, although preparatory work for both products was still in the early stage.

METALS-Copper steady; caution reigns over Greece deal
SHANGHAI, Feb 14 (Reuters) - London copper was almost unchanged on Tuesday after a two-session losing streak, as investors took a cautious stance over Greece's approval of harsh austerity measures and traders noted scant buying from top consumer China.
Three-month copper on the London Metal Exchange  traded at $8,414 a tonne by 0444 GMT, down 0.1 percent from Monday's close, and retreating from modest gains early in the session. Prices have slipped by nearly 4 percent from 5-month peaks of $8,765 a tonne reached last week.

PRECIOUS-Gold dips with euro on Greece jitters
SINGAPORE, Feb 14 (Reuters) - Gold edged lower on Tuesday, tracking a weaker euro, as wary investors focused on whether Greece will be able to convince Europe to grant a much-needed bailout and implement unpopular reforms.
Gold greeted the passage of tough reform and austerity measures by the Greek parliament on Monday with a minor rise in prices, but the sentiment quickly soured as doubts on the bailout deal arose.

20120214 1122 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets fall as focus shifts to Athen's commitment
TOKYO, Feb 14 (Reuters) - Shares and the euro slipped on Tuesday, as initial relief over Greece's approval of harsh austerity measures in exchange for crucial aid gave way to doubts about Athens' ability to pursue the reforms, with social unrest intensifying.
"Market uncertainty remains high, since a number of steps remain to ensure that there is no disorderly default in the near term," Barclays Capital said in a note, adding that Greek parliamentary elections in April would make implementation risks of the austerity measures particularly challenging.

COMMODITIES-Oil, soy surge as Greek bailout measures weaken dollar
NEW YORK, Feb 13 (Reuters) - Oil surged on  Monday for its biggest gain in six weeks after Greece's approval of bailout measures boosted the euro against the dollar, but copper fell on doubts that Athens will avoid a debt default.
"Crude oil prices continue to draw support from a familiar set of factors: progress on Greek sovereign debt, risk of supply disruption linked to sanctions against Iran, and refinery outages that are seen limiting gasoline supply," Tim Evans,  energy analyst for Citi Futures Perspective, said in a note.

Oil up on Greek austerity measures, Iran tensions
NEW YORK, Feb 13 (Reuters) - Oil prices rose  on Monday after Greece approved austerity measures needed to acquire more aid and avoid default, sparking another round of investor optimism, and as tensions between Israel and Iran reinforced concerns about supply disruptions.
"Crude oil prices continue to draw support from a familiar set of factors: progress on Greek sovereign debt, risk of supply disruption linked to sanctions against Iran, and refinery outages that are seen limiting gasoline supply," Tim Evans,  energy analyst for Citi Futures Perspective, said in a note.

Record supplies, weather drive US natgas to lower close
NEW YORK, Feb 13 (Reuters) - U.S. natural gas futures ended lower on Monday as milder weather forecasts for this week and record high supplies continued to pressure prices despite recent reports of some production cuts.
"The announced cuts by producers (so far) do not look like they will have much of an impact on the overall supply and demand balances anytime soon. The vast majority of the price drivers are still pointing lower," Energy Management Institute's Dominick Chirichella said in a report.

Euro Coal-Offer surge trims $1/T from prompt prices
LONDON, Feb 13 (Reuters) - A surge of offers of almost every variety of coal in every cargo size for delivery into Europe pushed physical prices down by around $1.00 on Monday to $97.00.
"Whatever origin you want, multi, U.S., Colombian, Russian, in 25,000 tonnes to capesize cargoes, it's being offered," one trader said.

20120214 0958 Malaysia Corporate Related News.

Felda Global to join Bursa top 20 club
Felda Global Ventures Holdings, which is due to float its shares on Bursa Malaysia’s Main Market on 10 May, will rank among the local bourse’s top 20 companies upon listing. Felda Global will have an initial market cap of RM21bn when it makes its Bursa debut, well above its current value of RM3bn, Deputy Minister in the Prime Minister’s Department Datuk Ahmad Maslan said. Based on yesterday’s closing, Bursa Malaysia’s top 20 list was led by Malayan Banking with Sime Darby in second spot, with market caps of RM64.9bn and RM57.7 bn respectively. With a RM21bn market cap, Felda Global may come in at number 16 of the blue chip list. (BT)

Felda Global Venture Holdings will launch its initial public offering on Bursa Malaysia on May 10, Bernama cited a senior government official as saying today. A deputy minister in the prime minister's department, Datuk Ahmad Maslan, was reported by Bernama as specifying the date for the IPO, which is expected to be the largest stock debut this year in Malaysia. A source with direct knowledge of the deal told Reuters the IPO would raise as much as US$2bn (RM6.05bn) and would take place in early May. Felda Global, the business arm of the nation's federal land authority (FELDA), is an agri-business company focused on palm oil, rubber and sugar cane processing and cultivation. (Reuters)

Felda Global Ventures Holdings, which is due to float its shares on Bursa Malaysia‘s Main Market on May 10, will rank among the local bourse‘s top 20 companies upon listing. Felda Global will have an initial market capitalisation of RM21bn when it makes its Bursa debut, well above its current value of RM3bn, Deputy Minister in the Prime Minister‘s Department Datuk Ahmad Maslan said. It will also be the biggest initial public offering (IPO) so far this year. Ahmad said that preparations for the listing are 90%, with balloting, prospectus release and other related matters to be announced later. He said Koperasi Permodalan Felda (KPF) will hold its extraordinary general meeting on Feb 22 to decide whether it will approve the listing.(BT)

Petronas makes 2 gas discoveries offshore Sarawak
Petronas had discovered two gas fields offshore Sarawak with a total gas-in-place of 3.45trn standard cubic feet. The two discoveries were in the Kasawari and NC8SW fields in Block SK316. The Kasawari-1 well was drilled in Nov 2011 and found gas in the carbonate reservoirs. The well, drilled to a total depth of 3196 metres, penetrated about 1000 metres of gas column. (Financial Daily)

HSL wins RM82m Sarawak road job
Hock Seng Lee (HSL) has secured a RM82.2m contract for the construction of a road in Sarawak. In a filing with Bursa Malaysia, HSL said it had signed a sub-contract agreement with PN Construction SB for the job. It said that the scope of works included earthworks, drainage and culverts, road and bridges while the works on the project were due to be completed in the first quarter of 2014. (StarBiz)

PLS shareholder selling 76.5mil shares
PLS Plantations’s major shareholder Kumpulan Prasarana Rakyat Johor SB (KPRJ) has agreed to sell 76.5m shares at RM1.21 each to Iskandar Waterfront Holdings SB (IWH). PLS said it had received a notification from KPRJ informing that the latter had entered into a share sale agreement with IWH, whereby the latter would acquire 76.5m shares of 20 sen each in PLS for RM1.21, being a 5 sen premium on the five-day weighted average share price. (StarBiz)

MNRB: PNB selling stake?
Industry observers say companies in the Permodalan Nasional Bhd (PNB)  stable such as  MNRB Holdings (MNRB) may be up for sale. This is following a recent announcement by the  Government that PNB and Khazanah Nasional would each divest five companies as part of a  strategy to increase bumiputra participation in the corporate sector. PNB has direct stakes in  36 listed companies on Bursa Malaysia, the core assets (in which the asset manager and  associated funds have a controlling or majority stakes) would be Malayan Banking, SP Setia,  Chemical Co of Malaysia and Amanah Harta Tanah PNB.  This would leave a second-tier of  listed companies where PNB has substantial stakes which includes majority-owned MNRB.  Given the spate of merger and acquisition (M&As) exercises among insurance firms in the  past year, the loss-making MNRB could be a target for divestment since whoever gets the  PNB stake would be in control of the company. (Starbiz)

Axiata: Idea’s mobile license revoked
Axiata Group, the second biggest institutional shareholder in India-based Idea Cellular Ltd, is  disappointed with the Indian Supreme Court's decision to revoke Idea's licence to operate  mobile telephony services in the south Asian country. Idea, along with 7 other mobile phone  operators, had been affected by India's Supreme Court's decision at the beginning of this  month to revoke their licences after it was discovered that these licences were issued under  a scandal-tainted bid back in 2008. Axiata, however, said it was a committed investor in Idea  and had a long-term view on India which represented an important and strategic stake for  Axiata.  Axiata also said that the impact on its net profit due to this  incident  would be  negligible as Idea's contribution amounted to less than 5% of Axiata's profit after taxes and  minority interests (PATAMI). Axiata, which earlier reserved its comments on this issue, said it  would leave the decision to Idea's management on how to deal with the auction process,
expected to be called by the Indian authorities soon. (Starbiz)

AirAsia: Australia probe found inexperience
AirAsia X pilot Australian air safety investigators have found that the two AirAsia X crews who flew  dangerously low into Australia’s Gold Coast were probably not adequately equipped to make  the descent. Australia’s Transport Safety Bureau (ATSB) said the flights from Kuala Lumpur  on May 4 and May 29 2010 descended into the northeastern Australian airport below  minimum safe altitude. As a result, the aircraft descended to an altitude where there was no  longer separation assurance from terrain and aircraft operating outside controlled airspace.  (Business Times)

MAS: Unions meeting PM today
Representatives from all the unions and associations of Malaysia Airlines (MAS) are due to  meet with Prime Minister Datuk Seri Najib Razak today in its second attempt to undo the  share swap between Khazanah Nasional and AirAsia owners. Malaysian Airline  System  Employees’ Union (Maseu) president Alias Aziz said all the unions and associations will be  represented at the meeting. We will be having a press  conference after that at 2.30pm.  Although it is uncertain what such a meeting will achieve, it is understood that already  demoralised MAS staff saw red with the recent appointments of AirAsia’s key personnel to  top posts in the national carrier.  Each union and association will be sending two  representatives. (Business Times)

Proton: Denies plan to ditch Lotus
Top executives of both Proton and Lotus  on Monday dismissed speculation that the  ownership of the latter was about to change hands. They acknowledged that the rumours  were beginning to hit morale, especially at the national carmaker, as well as affect its sales  and relationship with suppliers. Proton managing director Datuk Seri Syed Zainal Abidin Syed  Mohamed Tahir said Proton’s current plan is to continue the business plan based on what  they did before, unless the new shareholder  says otherwise.  Lotus chief executive Dany  Bahar also denied a separate report that he was seeking funding for a management buy-out  of the carmaker. (Starbiz)

Aviation: IATA says Asians expected to travel more
The International Air Transport Association (IATA) says in terms of propensity to travel, Asia  has tremendous potential for future growth. Its director-general and CEO, Tony Tyler said the  average person in the US travels by air 1.8 times per year, while in Germany the equivalent is  one trip annually. He said for China the average is 0.2 air trips per person per year and for  India it is just 0.1. He also said that within the next decade, China is expected to reach the  $15,000 per capita income level at which point annual air travel becomes possible which will  results in  extra 1bn annual travelers. The IATA's passenger forecast has projected that by  2015, Asia-Pacific will represent 37%  of traffic, while traffic associated with Europe and  North America will fall to 29%. Total passengers worldwide are expected to rise to 3.55bn during the same period, with routes associated with China to see a significant rise in the  passenger traffic as well. (Bernama)

Oil & Gas: Petronas finds gas offshore Sarawak
Petronas has made two gas discoveries in the Kasawari and NC8SW fields in Block SK316  offshore Sarawak via exploration wells Kasawari-1 and NC8SW-1. The Kasawari-1 well was  drilled in Nov 2011 and found gas in the carbonate reservoirs. The well, drilled to a total  depth of 3,196 metres, penetrated about 1,000 metres of gas column -- the longest drilled  section of gas column in Malaysia. Preliminary assessments carried out in early Feb 2012  indicate that gas-in-place for the Kasawari field is over 5trn standard cubic feet (TSCF) with  estimated recoverable hydrocarbon resource of just over 3trn TSCF, making it one of the  largest non-associated gas fields in Malaysia. The recoverable resource for the NC8SW field is  estimated at more than 450bn standard cubic feet of gas. For 2012, PETRONAS and its  production sharing contractors are planning to drill 30 exploration wells to further enhance  the prospect of Malaysia’s basin.(Business Times)

Companies in the Permodalan Nasional Bhd (PNB) stable such as MNRB Holdings, Bonia Corp and Asia File Corp may be up for sale. This is following an announcement by the Government that PNB and Khazanah Nasional would each divest five companies as part of a strategy to increase bumiputra participation in the corporate sector. The loss-making MNRB could be a target for divestment since whoever gets the PNB stake would be in control of the company. (Star Biz)

Rohatyn Group, a US-based emerging markets asset manager founded by formerJPMorgan & Co bankers, said yesterday that it has agreed to acquire 60% of CapAsia, the private equity arm of Malaysia's CIMB Group Holdings Bhd. Financial details of the transaction were not disclosed. Singapore-based mid-market fund CapAsia has raised more than US$500m in capital commitments across three funds, including an Islamic fund, and has more than US$400m in assets under management. CIMB's sale of a stake in CapAsia comes as banks are turning off commitments to new private equity funds and jettisoning existing assets, anticipating regulation that makes holding private equity assets more costly. "The CapAsia transaction builds on Rohatyn's strategy to grow our private investing business in Asia in infrastructure and real estate," CEO Nicolas Rohatyn said, adding that the venture offers an investment platform "in this attractive and fast-growing region.
"CapAsia funds invest in infrastructure projects in emerging Asia non-BRIC countries. (BT)

Wilmar International has managed to strike out a close to RM1bn defamation suit that had been initiated by Malaysian-based palm oil trading firm Pacific Inter-Link Sdn Bhd (PIL). Wilmar said that the High Court had ordered PIL's writ of summons and statement of claim to be struck out, with costs to be paid by PIL to all the defendants, including Wilmar. (Starbiz)

AirAsia announced the appointment of Andrew Littledale as the budget carrier‘s new group CFO. Littledale will assume leadership responsibilities across the group‘s accounting and financial functions. He succeeds Rozman Omar who has left for Malaysia Airline System as the national carrier‘s new group CFO. (Bernama)

The Brunsfield Group is the latest property developer to have inked a deal with Iskandar Waterfront Holdings Bhd (IWH) to develop a parcel of land close to the waterfront area in Johor Baru, industry sources said. The source added that the development to be undertaken by Brunsfield and IWH would have a GDV of around RM3bn. (Star)

Green Packet Bhd, the service provider of WiMAX broadband, will transform itself into a mobile company to offer more than just broadband solutions and expects to return to the black. Anyone with a smartphone or multi devices will be able to access P1's broadband, fixed voice, value-added services, and applications and mobile services by mid-2013. (StarBiz)

Interest in Time Engineering Bhd shares soared yesterday as the debt-free ICT firm is said to have attracted three bidders to take up a controlling share in it. The Edge weekly reported that Khazanah Nasional Bhd has three bidders for its 45.03% stake in Time and the government investment arm is in them midst of evaluating the proposals from the bidders. The weekly gathered that the bidders were likely to be ICT consultancy firm Zamcorp Bhd, IT solutions company MM Tech Corp, and an entity linked to Tan Sri Syed Mokhtar Albukhary. (Financial Daily)

Tune Money is reinventing itself as a ‗supermarket banker‘, and is leveraging its association with AirAsia to reach the top of the league. According to CEO Peter Miller, supermarket banking is not an entirely new concept in UK and US, but is considered a revolutionary idea in this region. Names like Tesco or Sainsbury‘s have managed to establish themselves as leaders in the consumer banking scene there. Miller lays out his ambitious plans to lead Tune Money to become a leading consumer banking institution, starting with its recently relaunched prepared-cum-loyalty programme card, the Big Card, a collaboration with AirAsia. With the Big Card, after accumulating points, cardholders can opt to redeem all their points for flight tickets. (Financial Daily)

Malaysia Building Society (MBSB) has come out in the open to deny speculations and news reports that the company was going to be privatized in the near term. On Saturday, a local business daily reported that the company‘s major shareholder Employees Provident Fund (EPF) was considering privatizing MBSB to allow the former to do much more with its residual properties. (Malaysian Reserve)

Petronas discovers gas offshore Sarawak
Petronas has made two gas discoveries in the Kasawari and NC8SW fields in Block SK316 offshore Sarawak via exploration wells Kasawari-1 and NC8SW-1. Preliminary assessments carried out in early February 2012 indicate that gas-in-place for the Kasawari field is over five trillion standard cubic feet (TSCF) with estimated recoverable hydrocarbon resource of just over three TSCF, making it one of the largest nonassociated gas fields in Malaysia. (Bernama)

Hektar REIT net income up 121%
According to Hektar Asset Management Sdn Bhd, that its Hektar Real Estate Investment Trust (Hektar REIT) net income increased by 121% to RM86.7m, or 27.08 sen per unit, last year. The gain was attributed to the revaluation of its investment properties. (Business Times)

Heilesen moves to bring GPRO back into the black
The new shareholder of GPRO Technologies Bhd is toying with several ideas to grow the company, including injecting new IT businesses to return it to profitability. GPRO, which develops IT solutions for textile and apparel manufacturers, has been in the red since 2005. (Business Times)

20120214 0958 Global Economic Related News.

Australia: December home loans jump by most in seven months
Australian home-loan approvals jumped in December by the most in seven months and exceeded economists’ forecasts as buyers responded to central bank interest-rate reductions. The number of loans granted to build or buy houses and apartments increased 2.3% to 48,453, the highest in almost two years, from a revised November increase of 1.8%, the statistics bureau in Sydney yesterday. The median estimate in a Bloomberg News survey of 20 economists was for a 1.8% gain in approvals. (Bloomberg)

South Korea is preparing to launch talks on a free trade agreement with Vietnam as part of efforts to strengthen economic ties with the fast-growing market, the finance ministry said. "Based on the results of the joint study, we are taking domestic procedures to launch FTA negotiations with Vietnam," the ministry said, adding that Seoul will try to include not just products, services and investment but other areas such as intellectual property rights in the talks. (AFP)

The Bank of Korea announced that it plans to maintain an accommodative policy stance to help shield the economy from the euro-zone sovereign debt crisis, in its clearest indication yet that it would not change its benchmark interest rate just yet. "The Bank of Korea held the base rate during the latter half of 2011 at 3.25%. It intends to retain [a] financial accommodative stance," the BOK said in a statement. (WSJ)

China: May need to fine-tune economic policy this quarter, Premier Wen says

Chinese Premier Wen Jiabao said the nation needs to start “fine-tuning” economic policies this quarter, the first indication of a timeframe for an adjustment he has pledged since October. Economic circumstances 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 Xinhua 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. Wen’s remarks may fuel speculation that the government will soon ease policy further to preserve growth in the world’s second-biggest economy after weaker exports and slower lending last month. (Bloomberg)

Japan: Economy swings to contraction as yen undermines exports
Japan’s economy shrank an annualized 2.3% in the fourth quarter, more than economists estimated, as slumping exports undermine a recovery from last year’s record earthquake. The contraction compared with the median forecast for a 1.3% decline in a Bloomberg News survey of 26 economists. Growth was a revised 7% in the previous quarter, the Cabinet Office said yesterday in Tokyo. (Bloomberg)

Japan: Noda tax, reactor closures narrow deflation bets
Japan’s bond market is pricing in the lowest deflation in more than two years as investors bet  that spending ahead of a sales tax increase along with higher energy costs will push up  consumer prices. The breakeven rate, the difference between yields on 5-year government  notes and inflation-indexed securities, a gauge of trader expectations for consumer prices  over the life of the debt, rose to negative 0.02% Feb 10, the highest since Jun 2009 when  Bloomberg started compiling the data. The rates were 1.89% in the US and 1.38% in  Germany. (Bloomberg)

Hong Kong: Economy may contract on exports
Financial Secretary John Tsang said Hong Kong’s economy may shrink this quarter if exports  fail to improve amid faltering global growth.  In a sign of the toll that weakness in global  demand is taking on Asian economies, Japan on Monday reported a contraction for 4Q 2011.  China’s exports and imports fell for the first time in more than two years in Jan, partly  because of the disruption of a weeklong Lunar New Year holiday, the government said last  week. (Bloomberg

EU: European leaders ‘confident’ Greece meeting bailout demands
Germany and the European Commission welcomed Greek approval of the austerity steps demanded for a financial lifeline, suggesting euro finance chiefs will pull Greece back from the brink when they meet in two days. The Greek parliament’s backing “is a crucial step forward toward the adoption of the second program,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels yesterday. “I’m confident that the other conditions, including for instance the identification of the concrete measures of EUD325m (USD430m), will be completed by the next meeting” of finance ministers. (Bloomberg)

EU: Moody's downgrades Italy, Spain, Portugal and others; UK, France on credit watch negative
Moody's just downgraded Italy, Malta, Portugal, Slovakia, Slovenia, and Spain. The rating agency also issued negative outlooks for Austria, France, and UK who are all 'still' keeping the Aaa rate. The adjustments on the sovereign debt ratings of selected EU countries reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis and how these risks exacerbate the affected countries' own specific challenges. (Moody’s)

UK: CBI says economy to avoid recession and will gain momentum in 2012
The Confederation of British Industry said UK’s economy will avoid a technical recession and  the recovery will gain momentum this year, avoiding the need for more quantitative easing  by the Bank of England. CBI Director-General John Cridland said that there will be marginal  growth this quarter. He noted that they did not assume that there will be a further package  of QE in their growth forecasts. (Bloomberg)

US: GOP drops objection for extending payroll tax cut
In a surprise about-face, Republican leaders in the US House of Representatives dropped  their demand on Monday for spending cuts to offset the costs of extending a soon-to-expire  payroll tax cut for 160m workers. The Republican offer represented a potential breakthrough  in deadlocked negotiations with Democrats but it could draw fire from budget-slashing  conservatives within the party who are staunchly opposed to adding to a trillion-plus deficit.  Notably, the offer was issued by House Speaker John Boehner, the top Republican in  Congress, and his deputy Eric Cantor, who has often taken a more hardline approach in  budget negotiations with Democrats over the past year. Talks on extending the payroll tax,  which is due to expire on Feb 29, have been stalled over how to pay for it, with both sides  refusing to make significant compromises and accusing each other of bad faith negotiations. (Reuters)

US: Growth forecast in Obama budget exceeds economist estimates
The Obama administration’s budget predicts the US economy will grow 2.7% this year, a  forecast that’s more optimistic than those of private economists and Federal Reserve policy  makers. The White House raised the 2012 estimate from 2.6% in Sept. Economists forecast  an expansion of 2.2% at an annual rate, according to the median of 79 estimates in a survey  by Bloomberg News conducted from Feb 3 to Feb 9. The White House’s growth forecast for  2013 was cut to 3% from 3.5% in Sept. The administration’s projections released Monday are  based on information available as of Nov. The president’s economic team has become more  optimistic about the economy, leading them to lower their unemployment forecast. Obama’s  advisers see employers adding 2m jobs this year if administration policies are adopted. (Bloomberg)

US: Obama budget seeks funding for trade as China’s Xi arrives
President Barack Obama asked Congress for $26m and at least 50 people for a new US panel  to investigate unfair trade practices by nations including China, whose Vice President Xi  Jinping arrives today for a US visit. Gene Sperling, director of the National Economic Council  said the 2013 budget proposal Obama submitted to Congress on Monday contains funds for  an Interagency Trade Enforcement Center that would monitor and enforce trade agreements  and laws. Obama announced his intention to create the panel, which includes lawyers,  researchers, analysts and agents supported by the Commerce Department and US Trade  Representative, in his Jan 24 State of the Union speech.  (Bloomberg)

20120214 0941 Global Market Related News.

Asian Stocks Decline as Moody’s Cut Debt Ratings of Six European Nations (Source: Bloomberg)
Asian stocks fell, trimming yesterday’s gains, after Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal, reviving concern about the region’s debt crisis. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that gets 21 percent of its revenue in Europe, slid 1.9 percent. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, lost 0.7 percent in Sydney after oil dropped from a five-week high. Macquarie Group Ltd. (MQG), Australia’s largest investment bank, fell 2.3 percent after it cut a tenth of its workforce in Asia last week, according to two people with knowledge of the departures. The MSCI Asia Pacific Index dropped 0.2 percent to 125.55 as of 10:05 a.m. in Tokyo after rising 0.7 percent yesterday. Seven of the 10 industry groups on the index slid.
“Moody’s is sort of lagging the other ratings houses here,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The reality is we’ve been talking about this for so long that it should hardly be a surprise to anybody. But you tend to get negative knee-jerk reactions because that’s the way the markets work.”

Japanese Stocks Decline After Moody’s Downgrades Italy, Spain, Portugal (Source: Bloomberg)
Japanese stocks declined after Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal, reigniting concern the region will struggle to contain its crisis. Sony Corp. (6758), a maker of consumer electronics that gets about 21 percent of its sales from Europe, slipped 1.7 percent. MS&AD Insurance Group Holdings Inc. dropped 2.1 percent after the non- life insurer forecast a full-year loss, citing claims to cover damage stemming from Thailand’s floods. Sumitomo Rubber Industries Ltd. gained 2.6 percent after the tiremaker beat its profit forecast. The Nikkei 225 Stock Average fell 0.1 percent to 8,991.33 as of 9:33 a.m. in Tokyo, with about five shares falling for every four that rose. The broader Topix Index was little changed at 781.79, after swinging between gains of 0.1 percent and losses of 0.2 percent.

U.S. Stocks Advance as Greek Lawmakers Approve Austerity Plan (Source: Bloomberg)
U.S. stocks rose, after the first weekly loss for the Standard & Poor’s 500 Index in 2012, as Greece approved austerity plans to secure rescue funds. Bank of America Corp., JPMorgan Chase & Co. and Caterpillar Inc. (CAT) increased at least 1.7 percent to lead gains in the Dow Jones Industrial Average. Apple Inc. (AAPL) climbed 1.9 percent to trade above $500 for the first time. Chesapeake Energy Corp. added 2.4 percent after the natural-gas driller said it’s targeting as much as $12 billion in asset sales and joint ventures this year. Advanced Micro Devices Inc. (AMD) surged 3.4 percent after being raised at Sanford C. Bernstein & Co. The S&P 500 advanced 0.7 percent to 1,351.77 at 4 p.m. New York time. The Dow increased 72.81 points, or 0.6 percent, to 12,874.04. The Nasdaq Composite Index gained 1 percent to 2,931.39, the highest level since 2000. The Russell 2000 Index of small companies climbed 1.4 percent to 824.81.

European Stocks Climb After Greek Austerity Approval: C&W Worldwide Surges (Source: Bloomberg)
European (SXXP) stocks advanced the most in more than a week after Greek lawmakers approved austerity measures needed to get the financial rescue the nation seeks. Mining shares led the rally. Cable & Wireless Worldwide Plc surged 45 percent after Vodafone Group Plc (VOD) said it’s considering an offer for the company. Commerzbank AG (CBK) and Lloyds Banking Group Plc (LLOY) each added 1.6 percent. The Stoxx Europe 600 Index gained 0.7 percent to 263.17 at the close. The benchmark measure made the “Golden Cross (SXXP),” with its 50-day moving average rising above the 200-day average for the first time since Sept. 3, 2010, a signal for further increases according to some technical analysts.

Yen, Dollar Gain as Moody’s Rating Cuts Boost Demand for Haven; Euro Drops (Source: Bloomberg)
The yen and dollar gained versus most of their major counterparts after Moody’s Investors Service cut ratings for European nations including Italy, Spain and Portugal, boosting demand for safer assets. The two haven currencies strengthened after Moody’s revised its outlook on the top Aaa grades for the U.K. and France to “negative.” The euro slid for a third day before finance ministers from the region’s 17 nations meet tomorrow to discuss a second aid package for Greece, following the country’s approval of austerity measures. The Australian and New Zealand dollars dropped as Asian stocks declined, curbing risk appetite. “Those Moody’s cuts have taken some of the steam out of investor risk appetite and we’re seeing knee-jerk losses, not only in euro, but also the risk-sensitive currencies,” said Mike Jones, a foreign-exchange strategist at Bank of New Zealand in Wellington. “At the same time, we’re seeing broad strength in the yen and U.S. dollar.”

Moody’s Cuts Europe Sovereigns Including Italy, Spain (Source: Bloomberg)
Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and revised its outlook on the U.K.’s and France’s top Aaa ratings to “negative,” citing Europe’s debt crisis. Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta. “The uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework” and the resources that will be made available to deal with the crisis, are among the main drivers of Moody’s action, the ratings company said. The euro slipped 0.2 percent to $1.3154, and the pound weakened 0.3 percent to $1.5723.

Treasuries Hold Gains as Europe Rating Cuts Support Demand for U.S. Haven (Source: Bloomberg)
Treasuries (YCGT0025) maintained two days of gains after Moody’s Investors Service cut credit ratings of six European countries, boosting demand for the relative safety of U.S. government debt. Ten-year yields remained below 2 percent before euro-area finance ministers meet tomorrow to discuss a second aid package for Greece, following the nation’s approval of austerity measures. The appeal of Treasuries was limited before data today forecast to show U.S. retail sales rose in January by the most in four months, fueling speculation that yields are too low given signs the economic recovery is gaining momentum. “What we’ve been seeing is a tug of war between Europe’s debt crisis and the U.S. recovery,” said Kazuaki Oh’e, a debt salesman in Tokyo at CIBC World Markets Japan Inc., a unit of Canada’s fifth-largest lender. “Moody’s downgrades are likely to encourage some buying of Treasuries.”

Multifamily Buildings to Lead U.S. Construction Gains: Economy (Source: Bloomberg)
Construction of multifamily units will lead the U.S. building industry again this year, allowing housing to contribute to growth for the first time in seven years, according to economists Michelle Meyer and Celia Chen. Work will begin on about 260,000 apartment buildings and townhouse developments in 2012, up 45 percent from last year and the most since 2008, according to Meyer, a senior economist at Bank of America Corp. in New York. Chen, an economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, is even more optimistic, projecting a record 74 percent jump to 310,000. Home ownership rates, which have declined to the lowest levels since 1998, may keep dropping as the foreclosure crisis turns more Americans into renters. In addition, household formation will probably accelerate as an improving economy and growing employment embolden more people to stop sharing residences and strike out on their own.

Bernanke Labor Pessimism Seen Misplaced as U.S. Expands in 2012 (Source: Bloomberg)
In his six years as Federal Reserve Chairman, Ben S. Bernanke has sometimes proved too sanguine about the U.S. economy, declaring the impact of bad subprime mortgages on the financial markets “contained” in 2007 and being too optimistic about growth last year. Now that employment is accelerating, economists wonder if the central bank again will prove to be mistaken, this time by being pessimistic about the outlook. An improving job market, stepped-up U.S. bank lending and resurgent financial markets all could combine to boost demand. The jobless rate fell to the lowest level in three years in January, while consumer credit racked up its biggest two-month gain in a decade at the end of 2011. The stock market had its best January in 15 years, with the Standard & Poor’s 500 Index now up 6.8 percent since the start of 2012.
“The turn in the economy right now is very positive,” said Allen Sinai, president of Decision Economics Inc. in New York, who forecasts growth of 2.5 percent to 3 percent this year and a year-end jobless rate of 7.7 percent, compared with 8.3 percent last month. “We’re going to have a better year than a lot of people thought.”

Obama Futures Gaining With S&P 500 (Source: Bloomberg)
The Standard & Poor’s 500 Index’s biggest rally to start a year since 1991 is coinciding with a 15 percent increase in President Barack Obama’s re-election odds, showing growing investor confidence in the U.S. economy. The benchmark gauge for American shares has climbed as much as 7.5 percent in 2012, the most in 21 years, as unemployment fell and Federal Reserve Chairman Ben S. Bernanke vowed to keep interest rates near zero through 2014, according to data compiled by Bloomberg. The cost of a bet paying $10 should Obama win another term rose to $6 on Feb. 10 from $5.20 on Jan. 1 and below even money in November at Dublin-based bookmaker Intrade. “A better economy clearly improves the president’s re- election chances,” David Kelly, who helps oversee $394 billion as chief market strategist for JPMorgan Funds in New York, said in a Feb. 8 interview. “The markets are pretty good at figuring this out. If you look at the economy and you look at the string of data you can pretty much figure out what the odds are.”

Goldman Sachs Ends Hana Investment With $331 Million Stake Sale (Source: Bloomberg)
Goldman Sachs Group Inc. (086790) sold its entire 3.9 percent stake in Hana Financial Group Inc. for 372 billion won ($331 million), exiting its seven-year investment in the South Korean bank holding company. The Wall Street firm sold 9.5 million shares in Hana for 38,950 won apiece, or a 3 percent discount from yesterday’s closing price, according to the terms of the transaction obtained by Bloomberg News today. Goldman Sachs invested in Seoul-based Hana in 2005 and was the biggest shareholder before it sold 7.5 million shares in April 2011. Hana completed its biggest acquisition last week, buying Korea Exchange Bank for 4.4 trillion won from Lone Star Funds and Export Import Bank of Korea in an effort to narrow the gap behind KB Financial Group Inc. and Woori Finance Holdings Co.

Japan Swings to Contraction as Yen Undermines Exports: Economy (Source: Bloomberg)
Japan’s economy shrank an annualized 2.3 percent in the fourth quarter, more than economists estimated, as slumping exports undermine a recovery from last year’s record earthquake. The contraction compared with the median forecast for a 1.3 percent decline in a Bloomberg News survey of 26 economists. Growth was a revised 7 percent in the previous quarter, the Cabinet Office said today in Tokyo. Today’s report underscores pressure on Bank of Japan officials meeting today and tomorrow to consider more monetary easing as gains in the yen worsen losses for companies from Sony Corp. (6758) to Panasonic Corp. (6752) At the same time, the world’s third- biggest economy may get a boost this quarter from more reconstruction work, fading disruptions from floods in Thailand, and signs of improvements in the U.S.

Best-Performing Taiwan Fund Buying Higher-Yielding Europe Debt on ECB Cash (Source: Bloomberg)
Taiwan’s best-performing debt fund is buying Russian, Romanian and Turkish government bonds as the European Central Bank’s injection of funds into lenders helps ward off a cash crunch. Bryan Wang, who manages NT$6.1 billion ($207 million) of assets as a manager at Fuh Hwa Securities Investment Trust Co., said he added the securities to this year. His Emerging Markets High-Yield Fixed-Income Fund (FHEMHYA) returned 7.9 percent in 2012, the most of 115 debt funds in Taiwan tracked by Bloomberg. “If you look at the portfolios of major European banks, they have a lot of exposure in Eastern Europe,” Taipei-based Wang said in an interview yesterday. “Since the ECB is injecting funds into European banks, the money will flow into these countries, driving bond rallies.”

European Leaders ‘Confident’ Greece Meeting Bailout Demands (Source: Bloomberg)
Germany and the European Commission welcomed Greek approval of the austerity steps demanded for a financial lifeline, suggesting euro finance chiefs will pull Greece back from the brink when they meet in two days. The Greek parliament’s backing “is a crucial step forward toward the adoption of the second program,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. “I’m confident that the other conditions, including for instance the identification of the concrete measures of 325 million euros ($430 million), will be completed by the next meeting” of finance ministers. Euro-area finance chiefs will convene in Brussels on Feb. 15 for their second extraordinary meeting on Greece in a week. Frustrated after two years of missed budget targets, ministers declined to ratify the 130 billion-euro package in a special session on Feb. 9, demanding that Greek officials put their verbal commitments into law.

Greece Bailout Faces European Finance Chiefs After Parliamentary Approval (Source: Bloomberg)
European finance chiefs get the second chance in a week to pull Greece back from the brink of collapse after lawmakers in Athens approved the austerity measures demanded for a financial lifeline. Greece “will be saved in one way or another,” German Finance Minister Wolfgang Schaeuble told newspaper Welt am Sonntag yesterday, though the country must “do its homework.” Euro-area finance ministers will convene in Brussels on Feb. 15 for an extraordinary meeting called after they declined to ratify the 130 billion-euro ($172 billion) package in a special session on Feb. 9. Frustrated after two years of missed budget targets, the European authorities demanded Greek officials put their verbal commitments into law. The Greek parliament passed the legislation in the early morning hours today as rioters battled police and set fire to buildings in downtown Athens. Still, Schaeuble told German lawmakers on Feb. 10 that Greece was set to miss deficit goals, suggesting that the measures may fall short.

Spain’s Bumper January Bond Sales Widen Funding Gap to Italy: Euro Credit (Source: Bloomberg)
Spain’s bonds are poised to outperform Italy’s for a second year after the nation’s debt agency in Madrid raised more than a quarter of the funds it needs this year in the past six weeks. Spain has issued 25.4 billion euros ($34 billion) of debt so far this year, according to UBS AG estimates. Italy has sold 8 percent of its requirement while France has issued 16 percent and Germany 12 percent, the calculations show. All four nations will sell securities this week amid concern that a plan to help Greece avoid default is unraveling and may spark a fresh wave of contagion in the euro-region. “Spain’s funding this year has been massive,” said Gianluca Ziglio, an interest-rate strategist at UBS AG in London. “That is a huge amount and they’ve done it in one and a half months. The picture for Italy is the opposite and it doesn’t bode well because demand is weak.”

U.K. to Avoid Recession as ‘Stabilization’ Signs Emerge: Economy (Source: Bloomberg)
The U.K. economy will escape a recession and the recovery will gain momentum this year, avoiding the need for more quantitative easing by the Bank of England, the Confederation of British Industry said. “After a pretty stagnant winter where we flatlined, we think growth is starting again because we’ve got tentative signs of optimism,” CBI Director-General John Cridland said in an interview in London on Feb. 10. “There will be marginal growth” this quarter and “we’re not assuming in our growth forecasts that there will be a further package of QE.”
The Bank of England announced its latest round of bond purchases on Feb. 9 after the economy shrank in the fourth quarter amid turmoil from the euro-area debt crisis, bringing Britain to the edge of a recession. Cridland said sentiment had improved in recent weeks as signs of “stabilization” emerged in Europe and the global economy showed signs of resilience. Stocks advanced today and the euro strengthened after Greek lawmakers approved austerity plans to secure rescue funds.

Australian December Home Loans Jump by Most in Seven Months (Source: Bloomberg)
Australian home-loan approvals jumped in December by the most in seven months and exceeded economists’ forecasts as buyers responded to central bank interest-rate reductions. The number of loans granted to build or buy houses and apartments increased 2.3 percent to 48,453, the highest in almost two years, from a revised November increase of 1.8 percent, the statistics bureau in Sydney today. The median estimate in a Bloomberg News survey of 20 economists was for a 1.8 percent gain in approvals. Reserve Bank of Australia Governor Glenn Stevens lowered borrowing costs in November and December to 4.25 percent to buttress the housing market, support employment and boost confidence among consumers who are saving more. The RBA unexpectedly held its benchmark last week as signs mount that Europe is beginning to contain its sovereign-debt crisis and the U.S. recovery is gaining strength.

20120214 0941 Global Commodities Related News.

White House Proposes Slashing US Farm Subsidies (Source: CME)
The Obama administration is proposing to cut billions of dollars of farm subsidies and other spending from the U.S. Department of Agriculture's fiscal-year 2013 budget. The $23 billion USDA budget proposal--a 3% reduction in USDA spending for the fiscal year that begins Oct. 1--includes a complete elimination of the controversial direct-payment subsidy program as well as a reduction in crop-insurance subsidies and costly land-conservation programs. Cutting the subsidies now makes sense because farm revenue is at historical highs, according to the USDA budget proposal that the White House said will reduce the U.S. budget deficit by $32 billion over 10 years. Net farm income in the U.S. reached $110.9 billion last year, a 28% increase over 2010, according to government data. The USDA sends out billions of dollars to farmers in direct payments regardless of whether they need it and sometimes even if they aren't actually farming the land that is tied to the subsidies.
The Obama administration has previously proposed shaving the program that pays out roughly $5 billion a year to farmers, but opposition in Congress has remained strong. In June, Congress struck a provision from the FY 2012 spending bill that would have reduced the number of farmers in the U.S. who could collect farm subsidies by preventing any farmer with an adjusted gross income of more than $250,000 from getting direct payments. Farmers are now prevented from receiving those payments only if they have an AGI exceeding $750,000. About one million farmers on 260 million acres of land spread around 364 of 435 congressional districts currently collect direct payments, according to the USDA and the Environmental Working Group, a organization that wants to eliminate some farm subsidies and use the money to protect natural habitats.
"The direct-payment program provides producers fixed annual income support payments for having historically planted crops that were supported by Government programs, regardless of whether the farmer is currently producing those crops-or producing any crop, for that matter," the administration said in its budget proposal released. And many of the farmers who get the payments are already profitable, the White House said. More than half of the farmers who get them have an annual income of more than $100,000. But the White House also aimed reductions at the insurance companies that cover farmers. It costs the government about $10 billion a year to run a crop-insurance subsidy program that pays out about $7 billion to farmers in premium subsidies. The remaining $3 billion goes to private insurance companies and that is too much, the Obama administration said.
Subsidized crop-insurance companies collect a return on investment of about 14%, but that should be closer to 12%, according to a government study, and the reduction would cut government spending by $1.2 billion over 10 years. Another reduction--lowering the cap on administrative expenses that the government pays to insurance companies--would save about $2.9 billion over 10 years. Another area in USDA spending the White House wants to cut is conservation spending. There are too many programs that often overlap, it said. The Obama administration said it is now proposing "to reduce conservation funding by $1.8 billion over 10 years by better targeting conservation funding to the most cost-effective.

China Seeks Greater Agriculture Cooperation With U.S. -Minister (Source: CME)
China intends to pursue greater cooperation with the U.S. in food security, agricultural trade and joint research in agricultural science and technology, Agriculture Minister Han Changfu said, according to the transcript of an interview published on his ministry's website. Han made the remarks to the official Xinhua news agency ahead of Chinese Vice-President Xi Jinping's U.S. visit this week. In the interview, Han shared data on the bilateral trade that showed China running a trade deficit with the U.S. in the agriculture sector. In 2010, China imported $18.6 billion worth of agricultural produce from the U.S., accounting for 13% of total U.S. agricultural exports, Han said. China became the largest trade destination for U.S. agricultural products that year. In comparison, China exported $5.8 billion worth of agricultural produce to the U.S., 12% of its total agricultural exports. The U.S. is China's third-biggest agricultural export destination, Han said.
China is conducting an ongoing probe into U.S. exports of distillers' dried grains, a corn-based animal feed. Han didn't mention the issue in the interview, and didn't elaborate on the areas of cooperation he hoped the two countries would pursue.

USDA Budget Would Increase 2.5% in 2012 on Subsidies Before Cuts Kick In (Source: Bloomberg)
U.S. Department of Agriculture spending would rise 2.5 percent to $154.5 billion in the year starting Oct. 1 before crop-subsidy cuts kick in, beginning long-term reductions farmer aid, according to the budget President Barack Obama sent to Congress today. Ending so-called direct payments, paid to growers of major crops regardless of commodity prices, would save $22.7 billion through 2022. Total farm subsidies, including crop insurance and conservation, would fall $32 billion over the next decade, although spending by the agency that administers subsidies would rise 20 percent to $12.1 billion in fiscal 2013. Direct payments will end “because fiscal reality necessitates it,” Agriculture Secretary Tom Vilsack told reporters today in Washington after the budget was released. “We need a safety net, but that safety net’s going to change.”

Speculators Hike Commodity Wagers as Growth Improves (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 dragged higher by a rally in the soybean market. Traders say corn was a "reluctant" follower of soybeans, which climbed amid worries about South America's crop. The markets are tied together because they compete for US acreage, and any increase in soy acreage based on higher prices could mean fewer corn acres, which is supportive to prices. Traders say USDA's baseline corn acreage projection of 94M, up from 91.9M in 2011, was mostly a nonevent for the market. Corn joins other commodities gaining as worries about Europe's debt crisis abate for now. CBOT March corn ends up 7 3/4c to $6.39 1/2.

Wheat (Source: CME)
US wheat futures rally on spillover support from corn and soy, along with help from outside macro markets. Wheat lifted by a strong rally in soybeans, which was fueled in part by South America crop concerns, along with broader support from a weaker dollar after Greece approved austerity measures. Optimism about increased export demand due to Black Sea disruptions, and increased domestic demand because of wheat's discount to corn, added to the support. Still, traders note world and domestic supplies are abundant. CBOT March wheat ends up 11 1/4c to $6.41 1/4 per bushel, KCBT wheat closes up 10 1/4c to $6.83 1/4 and MGEX wheat ends up 3 3/4c to $8.06 3/4.

Rice (Source: CME)
US rice futures end sharply higher, bouncing back after steep losses Friday and a broader downtrend. The market has sunk recently due to poor demand and ample supplies, but traders say downside is limited as weaker prices may discourage farmers from planting rice this season. CBOT March rice jumps 42c, or 3.1%, to $14.13 1/2 per hundredweight.

Australian Wheat Exports To China May Double In 2011-12 -Rabobank (Source: CME)
Australian wheat exports to China could double this marketing year ending Sept. 30 to 1.2 million metric tons as prices are low compared with U.S. corn, Rabobank said in a monthly agribusiness review. Australian Standard White grade wheat of 10% protein is particularly competitive. Recently, about 93,000 metric tons were exported to China, where it will likely be used as part of the feed ration for hogs, Rabobank said. Rabobank estimates output will hit a record 27.7 million tons this crop year ending March 31, while the Australian Bureau of Agricultural and Resource Economics and Sciences forecasts it will hit 28.3 million tons. Abares will review its production estimate Tuesday. Australia's annual domestic consumption is around 6 million tons, and the remaining grain is available for export. Rabobank estimates exports this marketing year will reach a record 21 million tons. "Prices continue to trade under international values as the large domestic stock position weighs heavily on the market," the bank said.
Last week, the Australian Bureau of Statistics reported December exports took total shipments in the current marketing year to 4.99 million tons, up 31% from 3.80 million tons a year ago. ASX March milling wheat futures deliverable port in New South Wales last settled at A$206.50/ton, or US$192.30/ton, down from A$270/ton early in September.

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.

Ukraine grain exports at 335,000 T Feb 1-9
KIEV, Feb 13 (Reuters) - Ukraine exported about 335,000 tonnes of grain, mostly maize, in the first nine days of February, Kiev-based ProAgro consultancy said on Monday, citing data from Ukrainian sea ports.
ProAgro said Ukraine had exported about 287,000 tonnes of maize and 40,500 tonnes of wheat. No figures for the same period of 2011 were immediately available.

Vietnam may stockpile 1 mln T rice to keep price up-state TV
HANOI, Feb 13 (Reuters) - Vietnam could stockpile 1 million tonnes of milled rice to prevent domestic prices from falling when supplies pick up during the harvest of the winter-spring crop, its largest, state-run Vietnam Television said on Monday.
The volume, equivalent to 2 million tonnes of paddy and making up nearly a fifth of the crop output, would be kept aside for three months, the station said in a nationwide broadcast, citing the Vietnam Food Association.

Early glimpse of US crops may get second look
Feb 13 (Reuters) - A U.S. government report offering the first look at this year's crop s is expected to show farmers in the United States planting the largest area with corn since World War Two amid high prices and favorable weather.
The U.S. Agriculture Department baseline report, due out midday Monday, has historically had little impact since it is based on data from November and not on surveys from farmers that will be used for the more authoritative estimates issued in March.

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.

Speculators up corn, soy long amid S. American worry
Feb 10 (Reuters) - Large speculators raised their net long stakes in Chicago Board of Trade corn and soybeans on signs of improving export demand for U.S. commodities and uncertainty about the crops in South America, regulatory data showed on Friday.
Noncommercial traders, a category that includes hedge funds, boosted their net long in corn by 17,521 contracts to 143,085 in the week ended Feb. 7, according to the Commodity Futures Trading Commission's weekly commitments of traders report.

Argentine wheat reform disappoints farmers, so far
BUENOS AIRES, Feb 10 (Reuters) - Argentine farmers say they are still being paid below-market prices for wheat despite a new government export system aimed at  increasing competition among millers and exporters.
Growers had long urged President Cristina Fernandez to free the wheat market from a government-imposed quota system designed to ensure abundant domestic food supplies, but which they said benefited buyers at their expense.

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  .

Cotton Merchants Seek US Government Support To Stem Defaults (Source: CME)
Some of the world's largest merchants of cotton are seeking support from the U.S. government to stem a wave of contract defaults that resulted from a sharp swing in the fiber's price last year. "We are looking for some assistance from the government any way we can get it," William May, president of the American Cotton Shippers' Association, told Dow Jones Newswires on the sidelines of a cotton conference in Fort Worth, Texas Saturday. "We've got millions of dollars worth of cotton contracts that...have not been executed." ACSA's members include Cargill Inc., Noble Group Ltd., Olam International Ltd., Allenberg Cotton Inc., a unit of French trade house Louis Dreyfus, and Ecom Agroindustrial Corp., among others, May said.
The total value of the defaulted cotton is still being tallied, but May said it is in the "hundreds of millions of dollars," and between 3 to 5 million bales. That figure would mean the defaulted contracts would represent 20-30% of the 15.67 million bales produced last fall by the U.S., the world's top cotton exporter. Cotton prices hit a record $2.27 a pound last March as demand soared and supply suffered amid bad weather in some grower nations like Pakistan. But prices tumbled when demand wilted at the high prices, falling nearly 60% by the end of 2011 from the record peak. Many mills cancelled cotton orders that had been placed at the higher prices as much as a year in advance. The price swing crushed margins at apparel companies, commodity firms and textile mills.
The Liverpool, U.K.-based International Cotton Association, which sets the rules for most of the world's cotton trade, said it received a record 242 requests for arbitration in 2011. Cotton mills and merchants prefer ICA arbitration over courts in each country because the process is often faster, more uniform and less expensive. Between 2000 and 2010, ICA said it received an average of 45 requests per year. But in a shift, ACSA said it will jointly seek support from the U.S. government along with the National Cotton Council, an industry group, and an association of U.S. cotton cooperatives, known as Amcot. The effects of the defaults have been felt since they began in the second quarter of 2011 and now into 2012. "This is going to be continuing probably, until all of these high-priced contracts are taken care of," said Phil Bogel, chairman of ACSA and a cotton trader at Toyo Cotton Co. in Dallas.
The cotton groups plan to meet with members of the U.S. Agriculture Department and the Office of the United States Trade Representative to ask for "government-to-government" meetings with countries whose textile mills have defaulted on contracts, May said.

Coffee premiums set to weaken;sugar shrugs off India
SINGAPORE, Feb 13 (Reuters) - Coffee premiums are likely to soften in Asia this week because of recent gains in London futures, while steady demand will keep the sugar market alive despite rising supply from second-largest exporter Thailand, dealers said.
"In terms of economics, it probably doesn't make sense for them to hold on to coffee stocks, as the large pile-up would generate pressure on prices when the stocks are finally released for selling," said Lynette Tan, an analyst with Phillip Futures in Singapore.  

China Jan cotton imports 326,500 T, down 17 pct - report
BEIJING, Feb 13 (Reuters) - China's cotton imports in January totalled 326,500 tonnes, down 17 percent from a year earlier, to an industry website said on Monday, citing customs data.
Cotton imports last month fell 59 percent month on month, said the report on a website operated by China National Cotton Reserves Corp.

Ivorian cocoa reform on right track -W.Bank
ABIDJAN, Feb 11 (Reuters) - Efforts to implement Ivory Coast's reform of its cocoa sector are on the right track and could mean the West African country meets the conditions for debt relief by June, World Bank officials said during a visit on Saturday.
The reform of the top world grower's cocoa sector is meant to provide its farmers with a minimum price for their produce and is a key condition for debt relief under the IMF-World Bank Heavily Indebted Poor Country (HIPC) scheme - a vital part of its bid to rebuild after last year's post-election conflict.

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.

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.  
European utilities are running out of stockpile space at the key import hub of Amsterdam-Rotterdam-Antwerp and so are hesitant about taking the opportunity of buying prompt cargoes, which are $10 a tonne cheaper than forward, and placing them on stocks to use later in the year.

Brent rises above $118 after Greece passes bill
SINGAPORE, Feb 13 (Reuters) - Crude prices rose above $1, supported by a weaker dollar and expectations of a revival in demand growth, after Greece 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."

US oil demand to be sluggish for years: Lee Raymond
OSLO, Feb 10 (Reuters) - The United States may be living through 10 years of sluggish growth that does little to 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.

Oil Drops From Five-Week High on U.S Stockpiles, European Debt Downgrade (Source: Bloomberg)
Oil dropped from the highest price in almost five weeks on speculation fuel demand may falter as crude supplies rise in the U.S., the world’s biggest consumer of the commodity, and Europe struggles to tame its debt crisis. Futures slipped as much as 0.5 percent after closing at the highest since Jan. 10 yesterday. An Energy Department report tomorrow may show stockpiles increased a fourth week, the longest run of advances since April, according to a Bloomberg News survey of analysts. Moody’s Investors Service cut the debt ratings of six European countries and revised its outlook on the U.K.’s and France’s top Aaa rating to “negative.” Oil for March delivery slid as much as 45 cents to $100.46 a barrel in electronic trading on the New York Mercantile Exchange. It was at $100.59 at 10:35 a.m. Sydney time. The contract yesterday rose 2.3 percent to $100.91 for the biggest gain since Jan. 3. Prices are 19 percent higher the past year.

Iron Ore-Shanghai rebar hits 1-month low, ore may fall more
SINGAPORE, Feb 13 (Reuters) - China steel futures fell to their lowest in nearly a month on Monday, reflecting thin demand in the world's No. 1 consumer that has restrained its appetite for raw material iron ore.
Shanghai rebar futures bucked gains in other commodities, fuelled by news that Greek lawmakers passed an austerity bill which put Athens closer to securing more funds to avoid a debt default, reviving investor interest in risk assets.

20120214 0940 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures end at their highest point in nearly four months, as lower dollar sparked buying across commodities from crude oil to grains. Buyers also encouraged by threat of stressful weather returning to southern Brazil, analysts say, which may threaten crops and spur US export demand. Technical buying accelerated the advances down the stretch, with bullish traders excited by March soybeans ability to push above chart resistance at the $12.50 level, analysts add. New crop contracts rallied against corn, as traders push prices in an attempt encourage farmers to plant soybeans. CBOT March soy ended up 23c or 1.9% at $12.52/bushel.

Soybean Meal/Oil (Source: CME)
US soy product futures rallied with soybean futures. Soymeal futures led the advances, as the threat of stressful weather returning to southern Brazil, raise hopes for US export demand, analysts say. Soyoil ended higher, lost value to soymeal in the crush spread on slower exports. CBOT March soymeal ended up $10.50 or 3.3% to $330.50/short ton, and March soyoil finished up 0.52c to 53.05c/lb.

Palm oil gains as Greece passes austerity bill
SINGAPORE, Feb 13 (Reuters) - Malaysian crude palm oil futures gained after Greece passed an unpopular austerity bill, inching closer to securing a bailout deal that could help avoid a messy default.
"Traders are watchful of the weakness in the cash crude palm oil prices that could morph into a broader relapse given the fact that we are approching higher production month," said a trader with a local commodities brokerage in Kuala Lumpur.

Ukraine sees record sunoil exports in 11/12
KIEV, Feb 10 (Reuters) - Ukraine, the world's largest exporter of sunflower oil, plans to boost its sunoil exports by about 19 percent to a record 3.1 million tonnes in the 2011/12 season, the head of Ukrainian sunoil producers' union said on Friday.
Stepan Kapshuk told Reuters a rise in the 2011 sunflower seed harvest to about 9 million tonnes would allow Ukraine to produce 3.5 million tonnes of sunoil this season.