Wednesday, February 22, 2012

20120222 1813 FCPO EOD Daily Chart Study.

FCPO closed : 3250, changed : -18 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned downward, buyer taking profit.
Support : 3250, 3200, 3150, 3100 level.
Resistance : 3270, 3300, 3350, 3420 level.
Comment :
FCPO closed recorded small loss with sligthly lower volume participation. Soy oil price currently trading weaker after overnight closed rallied higher while crude oil price pulling back lower after recent rally.
Profit taking activities pressed FCPO and broad commodities price to correct lower after recent advances.
Daily chart reading 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 resistant or strength with quick cut loss and profit target.

20120222 1738 FKLI EOD Daily Chart Study.

FKLI closed : 1557, changed : -11.5 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : resumed weakening, buyer reducing position.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded loss with little improved volume transacted doing 3.5 points discount compare to cash market that closed little lower. Overnight U.S. markets closed mixed and today Asia markets ended mostly recorded small gain while European markets currently trading little lower.
Global market reacted differently over higher crude oil price, clueless Greece future development and weaker Yen.
Chart reading switch back to suggesting a correction range bound 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.

20120222 1720 Regional Markets EOD Daily Chart Study.

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

20120222 1555 Global Market & Commodities Related News.

Shares slip as Greek reality bites, oil worries
TOKYO, Feb 22 (Reuters) - Asia markets slipped as relief over Greece's latest  bailout turned to doubts that the debt-stricken country can keep to its austerity programme and concern about rising oil prices.
"If you look at how much the equity market had already moved year to date, you'd expect the market to take a bit of a breather," said Markus Rosgen, head of Asia strategy at Citigroup in Hong Kong. "Equity markets had run up quite quickly and strongly. A break is something that wouldn't surprise me."

FOREX-Euro relief proves fleeting; yen hits 6-mth low vs dollar
SINGAPORE, Feb 22 (Reuters) - The euro struggled to make headway on Wednesday, having retreated from near two-week highs as optimism over the long-awaited Greek bailout deal quickly gave way to concerns about economic growth and implementation risks.
The yen dipped against the dollar and touched a fresh six-month low, staying on the defensive after the Bank of Japan's surprise monetary easing last week.

US soybeans down on crop prospects; wheat weak
NEW DELHI, Feb 22 (Reuters) - Chicago soybeans fell  on expectations that farmers will boost plantings in America, encouraged by a $6.7 billion deal by China to buy a record amount of U.S. beans.
"Gradually everyone is getting to realise that the deal between the United States and China will encourage farmers to plant more  soybean now," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

Russian wheat exports seen at 22 mln T despite weather
SINGAPORE, Feb 22 (Reuters) - Russia will maintain its wheat exports at around 22 million tonnes in the year to June 2013 with minimal damage so far to the winter crop from adverse weather, lobby group the Russian Grain Union said on Wednesday.  
Russia has exported 18 million tonnes of wheat so far this year and expects to sell another 4 million before the year ends in June.

Conveyor collapse shuts ADM U.S. grain export facility
Feb 21 (Reuters) - A grain conveyor belt collapsed at an Archer Daniels Midland  elevator in Ama, Louisiana, late last week, halting loading at the export facility on the Mississippi River west of New Orleans, a company spokeswoman said on Tuesday .
The conveyor, which collapsed on Friday, connected the company's on-site grain storage elevators with the equipment that loads grain into bulk cargo vessels on the river.

Ivorian cocoa exports 640,492 tonnes by Feb 5-BCC
ABIDJAN, Feb 21 (Reuters) - Exports of cocoa beans and cocoa products from Ivory Coast hit 640,492 tonnes by Feb. 5 since the start of the season in October, down about 1 percent from a year earlier, data from industry regulator BCC obtained by Reuters showed on Tuesday.
According to the data, 53,861 tonnes were exported from the country's two ports between Jan. 30 and Feb. 5.

Brazil 2012 maize output seen at record 60 mln T-FAO
MILAN, Feb 21 (Reuters) - Brazil's total maize output, including main and second seasons, is expected to rise 7 percent to a new record of about 60 million tonnes in 2012 due to a surge in winter plantings, the United Nations' Food and Agriculture Organisation said on Tuesday.
The areas planted for the second season are estimated to expand significantly, including a 29 percent surge in plantings in the state of Mato Grosso, to offset an expected fall in the main season output after a long dry spell in major southern growing regions, the FAO said in its country brief.

Oil World says it may cut Brazil soy crop forecast
HAMBURG, Feb 21 (Reuters) - Hamburg-based oilseeds analysts Oil World said on Tuesday it may again cut its forecast of Brazil's 2012 soybean crop because of continued poor weather and warned a global soybean production deficit is looming because of poor South American harvests.
"The total Brazilian soybean crop could turn out below our latest estimate of 69.5 million tonnes," it said.

Brent crude falls toward $121 on euro zone worry, China data
SINGAPORE, Feb 22 (Reuters) - Brent crude fell toward $121, retreating from a nine-month high, as China's manufacturing sector shrank for a fourth straight month and worries about the euro zone debt crisis resurfaced, casting doubt on global economic health and prospects for fuel demand.
"Prices are correcting as we've already got the boost from Greece and Iran's pre-emptive stoppage of oil to Britain and France," said Tony Nunan, a risk manager at Mitsubishi Corp, adding that the slowdown in Chinese manufacturing activity also weighed on prices.

Japan wants to seal U.S. LNG import deal in spring -media
TOKYO, Feb 22 (Reuters) - Japan is hoping to reach an agreement to import liquefied natural gas (LNG) from U.S. projects in Louisiana and Maryland  at a bilateral summit meeting slated for this spring, the Yomiuri newspaper said on Wednesday.
Still reeling from the Fukushima nuclear crisis that has idled nearly all of it reactors amid public safety concerns, Japan has rapidly increased its LNG purchases, with imports growing 12 percent last year to a record 78.5 million tonnes.

Copper slips after rally, China data
SINGAPORE, Feb 22 (Reuters) - London copper softened a touch, as investors took a breather after a 2.6 percent rally in the previous session, while lingering concerns about Greece and the contraction in China's manufacturing sector kept the mood cautious.
"Copper prices are likely to remain rangebound in the short term, before we see any improvement in demand," said a Shanghai-based trader.

China Jan copper imports fall, seen low despite rate cut
HONG KONG, Feb 21 (Reuters) - China's refined copper imports fell almost 18 percent in January, official data showed on Tuesday, in line with preliminary figures, and analysts said imports were likely to stay weak to March despite monetary easing.
London copper prices rose on Monday by nearly 1.5 percent on Monday, breaking a six-day losing streak, after China's central bank cut on Saturday the amount of cash banks must hold in reserves, a step that is expected to boost lending capacity by more than $50 billion.

Global steel output falls, China's down 13 pct
LONDON, Feb 21 (Reuters) - Global steel production dropped in January, and output in top producer China fell 13 percent, data from a producers' body showed on Tuesday, as industrial demand remains weak and economic prospects are uncertain.
World crude steel production fell 7.8 percent to 117 million tonnes in January, compared with the same month last year, World Steel Association data showed.

Gold holds near 2-1/2-week high; Greece still a worry
SINGAPORE, Feb 22 (Reuters) - Gold edged down from a 2-1/2-week high as concerns about Greece's ability to implement an unpopular bailout deal balanced out the gains triggered by the actual agreement, and slower factory activity in China contributed to the fall.
"We don't see a substantial amount of enquiries in the physical market, either from the industrial or the jewellery sector," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.

METALS-Copper slips after rally, China data
SINGAPORE, Feb 22 (Reuters) - London copper softened a touch on Wednesday, as investors took a breather after a 2.6 percent rally in the previous session, while lingering concerns about Greece and the contraction in China's manufacturing sector kept the mood cautious.
China's HSBC flash manufacturing survey data released earlier in the day showed the sector contracted in February for the fourth straight month and new export orders dropped sharply. although the purchasing manager index (PMI) also rose to a four-month high of 49.7 in February.

PRECIOUS-Gold holds near 2-1/2-week high; Greece still a worry
SINGAPORE, Feb 22 (Reuters) - Gold edged down on Wednesday from a 2-1/2-week high as concerns about Greece's ability to implement an unpopular bailout deal balanced out the gains triggered by the actual agreement, and slower factory activity in China contributed to the fall.
Spot gold  rose to $1,759.84 an ounce in early trade, its highest level since February 3, before reversing course to fall 0.2 percent to $1,755.16 an ounce by 0330 GMT.  

20120222 1122 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets pause as Greece reality bites, oil worries
TOKYO, Feb 22 (Reuters) - Relief over a bailout for Greece proved fleeting for global markets, with Asian markets losing momentum on Wednesday as investors worried about the realities of Athens restructuring its debt, the fragility other euro zone states and rising oil prices.
"The market lacks a sense of direction today and will be stuck in recent ranges as we are at a level that prompts many investors to take profit," said Yutaka Miura, senior technical analyst at Mizuho Securities.

COMMODITIES-Broad rally after Greek deal, CRB at 2-1/2 mth high
NEW YORK, Feb 21 (Reuters) - Oil closed at nine-month highs on Tuesday and copper notched its biggest gain in six weeks on investor relief that Greece managed to averted a disastrous debt default after months of bitter negotiations.
"These are markets that are still very much categorised by a lack of conviction. In the short term, what we're going to see is more erratic trading, unless we get a series of events or data points that help to allay some of the concerns regarding economic growth," said Gayle Berry, metals analyst at Barclays Capital in London.

Oil rises to 9-mth high on Greece rescue, Iran cuts
NEW YORK, Feb 21 (Reuters) - Oil rose to a nine-month high on Tuesday after Greece received a financial bailout and top Asian consumers moved to cut crude purchases from Iran, following Western sanctions designed to limit the country's nuclear program.  
"With the Greece situation now being addressed ... (it) should weaken the dollar against the euro and boost commodities," said Chris Jarvis of Caprock Risk Management in New Hampshire.  

POLL-US crude stocks projected down for second week
Feb 21 (Reuters) - U.S. crude oil stockpiles were projected down last week for the second straight time on lower imports when inventory data are released later this week, a preliminary Reuters poll of analysts showed on Tuesday.
On average, the poll called for a crude drop of 400,000 barrels for the week to Feb. 17. Three out of five analysts surveyed predicted a drawdown.

China, India plan Iran oil cuts of 10 pct or more
BEIJING/NEW DELHI, Feb 21 (Reuters) - China, India and Japan are planning cuts of at least 10 percent in Iranian crude imports as tightening U.S. sanctions make it difficult for the top Asian buyers to keep doing business with the OPEC producer.
The countries together buy about 45 percent of Iran's crude exports. The reductions are the first significant evidence of how much crude business Iran could lose in Asia this year as Washington tries to tighten a financial noose around Tehran.

High supplies, weather drive US natural gas futures lower
NEW YORK, Feb 21 (Reuters) - Front-month U.S. natural gas futures ended lower on Tuesday as mild U.S. weather this week and record-high supplies weighed on prices despite the recent decline in drilling that could finally slow record production.
"On the weather front, the six- to 10 day and eight- to 14 day forecasts are still showing above-normal temperatures for the eastern one-third of the U.S. I do not expect the overhang of natgas inventories to dissipate anytime soon," Energy Management Institute's Dominick Chirichella said in a report.

Euro Coal-Prices steady, some utility buying seen
LONDON, Feb 21 (Reuters) - Prompt physical coal prices were unchanged on Tuesday although some European utility buying was seen.
"It looked at the start of the year as if there was a slight oversupply but it could rebalance - now I'm not so sure," one European trader said.

20120222 0953 Malaysia Corporate Related News.

Alstom-Mudajaya said to have won Tg Bin job
A consortium comprising Mudajaya Group, Eversendai Corp, and Alstom is said to have been appointed the main engineering, procurement and construction contractor (EPCC) for the expansion job of the 2,100 MW Tanjung Bin power plant. A signing ceremony between the companies and MMC Corp Bhd is expected to be held this week, sources told Financial Daily. “The 1,000MW expansion for Malakoff’s coal-fired plant is expected to cost around RM4.9bn-RM5bn,” said one of the sources. As such, this values the extension project at RM5m per MW. Sources say Mudajaya’s portion as the main contractor is estimated to be RM950m, while Eversendai’s contract is estimated at RM140m. (Financial Daily)

YTL Corp to delist YTL Cement
YTL Corp said it will proceed to delist YTL Cement as it has crossed the 90% shareholding of the latter. In a filling with Bursa Malaysia, YTL Corp said the acceptance of YTL Corp’s offer reached 91.08% yesterday, while its ICULS acceptance level touched 98.99%. Given the circumstances, YTL Corp said YTL Cement shares and ICULS will be suspended from trading 29 Feb onwards. (Financial Daily)

Alliance announces record dividend as profit rise
Alliance Financial Group is set to distribute a record dividend for FY12 ending 31 March due to its strong performance YTD. “In view of Alliance Bank group’s strong performance YTD, a second interim dividend of 7.7 sen per share, which will be payable on 28 Feb. This brings to the total dividend for the FY of 13.3 sen, which is a significant improvement compared to last year’s dividend payout of 7 sen, said CEO Sng Seow. (Financial Daily)

Glomac wins bid for Klang Valley parcels
Glomac Bhd said its wholly-owned subsidiary Kelana Kualiti SB has won the public auction of two pieces of land in the Klang Valley measuring a total of 80.7ha. The company will pay a total consideration of RM44m. “The proposed acquisition is in line with Glomac’s core development land bank within the Klang Valley with strong potential for prime and sizeable new developments,” it said to Bursa Malaysia. (Financial Daily)

MAHB offers RM70m incentives to airlines
Malaysia Airports (MAHB) has allocated RM70m for its incentive programme for airlines, with some changes made to the programme which expired on 31 Dec 2011. Last year, the airport operator paid out some RM91m worth of incentives to airlines. The tier-based incentive will award RM10 per passenger for the first 10% growth, RM12.50 per passenger for the next 8% growth and RM15 for all additional passengers above 18%. According to MAHB CFO Faizal Mansor, instead of a fixed baseline from which growth will be calculated, its payouts will be based on y-o-y passenger growth. The incentive is on top of a three-year free landing incentive for new airlines starting operations out of Malaysia. (BT)

Mobile service operators start talks on merger and acquisitions
Consolidation talks have begun in the telecommunication space where as many as nine parties have licences to offer mobile services. Industry sources said that one of the more active players pursuing an M&A exercise was the YTL Group which has approached Asiaspace SB and Green Packet Bhd. Asiaspace chairman Datuk Abdul Ghani Abdullah said that consolidation was the most “logical” thing to do. “Capital expenditure is so high in this industry that it is impossible for smaller companies to survive,” he said. (StarBiz)

The FELDA Investment Co-operative (KPF) has cancelled its extraordinary general meeting following a temporary court order blocking the transfer of shares from the co-operative to FELDA Global Ventures (FGV). A press statement by KPF secretary Abidin Abdul Rahman also confirmed the news of the EGM cancellation. ―The cancellation is due to the Kuantan High Court order, through an interim injunction dated February 17, 2012,‖ said Abidin. Last week, a group of settlers won a temporary court order blocking the transfer of shares from their co-operative to FELDA Global Ventures (FGV) Critics say the move short-changes more than 200,000 smallholders and saddle the Federal Land Development Authority (FELDA) with an annual deficit of RM1.5bn. The National FELDA Settlers’ Children’s Association (ANAK) have claimed mentri besars in the three Pakatan Rakyat (PR) states — Kedah, Selangor and Kelantan — have indicated to ANAK they will not sign the agreement, which must be agreed to by all state governments.
The government has said the move will result in a RM5.9bn lump sum payment to settlers but ANAK has insisted it will not be in cash but shares in FGV. FGV subsidiaries such as FELDA Iffco Sdn Bhd, FELDA Global Technologies, FELDA Global Ventures Middle East and FELDA Global Ventures Arabia are reported to have chalked up accumulated losses of around RM500m up to last year. (Malaysian Insider)

Scomi Engineering Bhd has successfully completed the maiden technical test run of India's first monorail project over a 2.2km distance between Wadala and Bhakti Park in Mumbai over the weekend. Scomi Engineering country president and Scomi International president Kanesan Veluppillai believes the project will pave way to many more monorail projects in India to cater for the country's fast growing infrastructural requirements. Over 21 other cities in India are considering and planning monorail as an option for its multimodal urban transport system. Kanesan said the train had been undergoing several tests for the last two weeks. The test-run will continue for the next two to three months to ensure seamless integration of the train with its civil structures. (BT)

Krisassets Holdings Bhd has revalued Mid Valley Megamall 18% higher at RM2.36bn as at Dec-2011, compared the revaluation as at Dec-2009 of RM2bn. It said the market value of The Gardens Mall is RM930m, which is 13.4% higher from the valuation on Sep- 2011, at RM820m. The revaluation was carried out by independent professional valuers, Jordan Lee & Jaafar Sdn Bhd. (BT)

Sarawak Cable Bhd intends to press on with the submission of a proposal to participate in transmission line projects in Sarawak despite the termination of a memorandum of understanding it had with Sinohydro Corp (M) Sdn Bhd and KEC International Ltd with intentions of making a joint proposal for the projects. (Malaysian Reserve)

MMHE: 3Q FY2011 net profit down 65.4% to RM46.4m y-o-y
Malaysia Marine and Heavy Engineering’s earnings fell 65.4% to RM46.4m in the 3Q FY2012 from RM134.2m y-o-y. Revenue declined 45.6% to RM716.2m from RM1.316bn  y-o-y.  EPS were 2.90 sen compared with 8.80 sen. MMHE’s board of directors recommended a final single tier dividend of 10 sen per share amounting to RM160.0m. The company said revenue from its engineering and construction division fell from RM1.269bn to RM594.1m mainly due to no further recognition of revenue from PCIC Turkmenistan Block 1, Phase 1 project in the quarter as compared to the corresponding quarter. For the 9MFY12, its earnings fell 36.1% to RM205.6m from RM322.1m  in  y-o-y. Revenue declined 39.1% to RM2.137bn from RM3.512bn. (Financial Daily)

Maybank: Proposes up to RM7bn subordinated note programme
Maybank has proposed to establish a subordinated programme of up to RM7bn in nominal value. Maybank said  it had obtained the SC’s approval for the establishment of the programme. It had on Dec 14, 2011 had also obtained Bank Negara’s approval to issue the subordinated notes. The net proceeds from the issuance of the subordinated notes will be utilised to fund Maybank’s working capital, general banking and other corporate purposes. It said the notes issued under the programme would qualify as Tier 2 capital of Maybank subject to compliance with the requirements as specified in the risk weighted capital adequacy framework and capital adequacy framework for Islamic Banks guideline by BNM. Maybank said the tenure of the would be up to 20 years from the date of first issuance of subordinated notes and have a tenure of either the following; 10-year non-callable basis; 15 years on a 15 non-callable 10 basis; 12 years on a 12 non-callable 7 basis or 10 years on a 10 non-callable 5 basis. (Financial Daily)

Maxis: Poised for special dividend payout
Sources familiar with the matter said Maxis’s board of directors will discuss the possibility of declaring a special dividend payout at their routine directors’ meeting which is usually held at the end of every month. The source added that the CFO, Nasutin Mohamed will present to the directors the financial health and cash flow situation of the company before any decision is made. Another source who sits on the board of Maxis confirmed the possibility of a special dividend payout after the company secured approval from  SC for the proposed 10-year sukuk issuance amounting to RM2.45bn. (StarBiz)

AirAsia: Revises downwards check-in baggage fees
AirAsia, has revised downwards its check-in baggage fees effective Wednesday in line with its commitment to make travelling more affordable for everyone. The airline has reduced the prices of 15-20 kilogramme baggage tiers, while its long-haul affiliate, AirAsia X, has lowered the 25-30 kilogramme baggage tiers. Both AirAsia and AirAsia X are introducing new options for 35-40 kilogramme baggage tiers based on popular demand. The company said the new check-in baggage fees will enable passengers to save up to 50%  when bookings are done online than buying tickets at the airport counters. (Bernama)

Iris: To build waste plant in China with partners
Iris Corp and a group of investors are joining forces to invest in the construction of a waste recycling plant in China. The company, via its subsidiary Regal Energy Sdn Bhd, had signed definitive agreement with Zheng ZhengChao, Zhou Ji and Weinan Zhouji Huanfa Renewable Resources Technology Development Co Ltd early this week. Regal Energy is a joint venture company between Iris Corp and Envirowerkz Sdn Bhd. The total investment for the project is about RMB96m. (Business Times)

QL Resources: 3Q FY2012 earnings slightly higher at RM34.4m
QL Resources’ net profit increased by 3.8% to RM34.42m in 3Q FY2012 from RM33.14m a year ago, due to increased sales in its marine product manufacturing arm, palm oil activities and livestock farming. Revenue increased 10.6% to RM498.96m from RM450.95m a year ago. EPS was 4.14 sen compared to 4.20 sen. The company said it recorded a 14% increase in sales from its surimi and surimi-based products, a 13% rise in sales of under its palm oil activities due to lower CPO prices and a 17% increase in sales contribution from farm products. (Financial Daily)

Tricubes: Unveils RTD eServices on myemail
Tricubes announced  on Tuesday the debut of two initial electronic services on, based on the Road Transport Development’s (RTD) driving licence and road tax reminder for myemail users. Its CEO Khairun Mokhtar said myemail users will receive reminders two weeks before their driving licence or road tax expires with this new RTD eService. The RTD reminders from myemail are digital versions of the same sent by the department via physical mail and is free. (Financial Daily)

Automotive: BNM’s new financing guideline hurts sales
Bank Negara Malaysia’s new responsible financing guideline, introduced last Nov, has severely hit Proton Edar Dealers Association of Malaysia’s sales, with only 30% of applicants securing car loans in the first two months of the year. Its president Armin Baniaz Pahamin said the growth of the automotive industry depends on customers’ ability to secure financing to buy a car.  The association said BNM should encourage healthy competition among bankers to provide financing for buyers and provide a standard procedure of compliance for the public to refer to when buying a car. (Bernama)

20120222 0953 Local & Global Economic Related News.

Malaysia: Factory investment approvals rose 18.8% in 2011
Malaysia’s approved factory investment rose in 2011 as an expanding economy prompted companies including Agilent Technologies Inc. and Infineon Technologies AG to increase spending. Approved investments rose 18.8% to RM56.1bn (USD18.6bn) last year, Malaysia’s International Trade and Industry Minister Mustapa Mohamed said in Kuala Lumpur yesterday. That compares with RM47.2bn in 2010. Approved foreign investment in manufacturing climbed to RM34.2bn last year from the RM29.1bn reported previously for 2010. (Bloomberg)

Malaysia's realised private investments this year are expected to increase to RM110bn from about RM94bn in 2011, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. "Based on progress achieved so far and projects to be implemented, we're confident that the targeted amount will be achieved. A large chunk of the investment, about 40% of it, come from oil and gas sector," he said. (Bernama)

Total investments approved in the manufacturing, services and primary sectors last year surged by 40.7% from RM105.6bn (4,368 projects) in 2010 to reach RM148.6bn (4,964 projects) in 2011. They are expected to create about 149,496 employment opportunities. Domestic investments in 2011 continued to exceed foreign direct investments (FDI), accounting for RM82.3bn or 55.4% of the total approved investments, while foreign investments totalled RM66.3bn or 44.6%. Sarawak attracted the highest amount of approved investments at RM14.4bn, followed by Penang (RM14bn), Sabah (RM13.7bn) and Selangor (RM13.5bn). (Bernama, Malaysian Insider)

Malaysia’s foreign direct investment (FDI) inflows increased 12.3% to RM32.9bn in 2011 from RM29.3bn in 2010, and the government expects to maintain a similar growth rate this year despite concerns over the global economy. International Trade and Industry Minister Datuk Seri Mustapa Mohamed emphasized that most of Malaysia’s FDI was derived from within Asia. The manufacturing sector accounted for the largest share of FDI inflows, comprising 50.1%, followed by the services sector with 27.3% and mining and quarrying at 22.2%, he said. (Financial Daily, Starbiz)

Approved manufacturing investment had yet to recover to pre-crisis levels, despite growing 18.9% to RM56.1bn in 2011 (RM47.2bn in 2010), as it was still well below the RM62.8bn recorded in 2008, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. Penang attracted the highest levels of approved manufacturing investment at RM9.1bn, followed by Selangor (RM8.7bn), Sarawak (RM8.5bn), Johor (RM6.6bn) and Kedah (RM6.1bn). (Malaysian Insider)

Singapore: House prices to drop in next 6 months

PropertyGuru, Singapore’s leading property site, revealed its 4Q11 survey results on the property market sentiment in Singapore. The survey indicates that home buyers and investors expect the new government measures to lower the cost of property, compared to 3Q11. Largely due to the impact of the ABSD (Additional Buyer’s Stamp Duty), 52% believe that property prices will decrease in the next six months. The government has imposed an ABSD for private property of between 3% and 10% for Singaporeans, Permanent Residents and foreigners to moderate investment demand for private residential property and promote a more stable and sustainable market since 8 Dec 2011. (StarBiz)

Indonesia’s government plans to raise 2012 budget deficit from Rp124tr or 1.53% of GDP in the revision of its budget, with plenty of fiscal movement room. (Indonesia Finance Today)

Indonesia’s government will consider raising subsidized fuel oil price if oil price moves above US$115 per barrel. (Indonesia Finance Today)

Indian annual consumer price inflation touched 7.65% yoy in Jan, higher than wholesale inflation of 6.55% yoy, but still suggesting price pressures are moderating, adding weight to views that the central bank has room to cut interest rates. (Reuters)

China: Junk bonds surge to best of BRICs on policy easing
Dollar-denominated junk bonds sold by Chinese companies are handing investors the third-best returns in global high-yield markets this year as policy makers loosen credit restrictions to support growth. The notes gained 11% through 20 Feb, the best performance among so-called BRIC economies and trailing only speculative-grade corporate debt from Norway and Venezuela among 33 economies tracked in Bank of America Merrill Lynch indexes. China’s central bank is relaxing lenders’ reserve requirements and injecting cash into the financial system to spur borrowing, which expanded in the 4Q at the slowest pace since 2009. (Bloomberg)

Japan’s all industry activity index rose 1.3% mom in Dec (-1% in Nov). (Bloomberg)

South Korea ran a trade deficit of US$3.86bn for the year to 20 Feb as exports barely grew while imports jumped, Korea Customs Service data showed, hit by the euro zone crisis and rising raw materials prices. (Reuters)

South Korea and the US have agreed that their long-delayed free trade agreement will take effect on 15 Mar, Seoul's trade ministry said. (AFP)

Australia: Central Bank sees scope for further rate cuts
Australia’s central bank said it has scope to ease monetary policy if needed, after keeping the benchmark interest rate unchanged this month as risks in Europe abated, minutes of its 7 Feb meeting showed. Policy makers “judged that if demand conditions were to weaken materially, the inflation outlook would provide scope for a further easing in monetary policy,” the minutes released today by the Sydney-based Reserve Bank of Australia showed. “While the financial situation in Europe remained fragile, the likelihood of an extremely bad outcome seemed to have diminished somewhat.” (Bloomberg)

EU: Central Banks said to swap Greek portfolio bonds
Euro-area central banks will swap the Greek bonds in their investment portfolios for similar securities to avoid enforced losses during a debt restructuring, a euro-area official said. The swap will happen today and is identical to one the European Central Bank carried out last week with the Greek bonds acquired in its asset-purchase programme, the official said. The new Greek bonds will be immune to collective action clauses, or CACs, ensuring central banks do not incur any losses when a private-sector debt write-down takes place, the official said on condition of anonymity. A spokesman for the Frankfurt-based ECB declined to comment. (Bloomberg)

EU: Ministers reach agreement on second Greek bailout package
Euro-area finance ministers reached agreement on a second bailout package for Greece that is vital to staving off a default next month. The deal includes a 53.5% or EUR200bn writedown for investors in Greek bonds, Luxembourg’s Jean-Claude Juncker, who led the meeting, told reporters early yesterday morning. Debt-swap bonds will have a coupon of 2% in 2014, rising to 3% in 2015–2020 and to 4.3% after that, he said. Finance ministers haggled into the night in Brussels over the terms of new loans to Greece and a possible contribution by central banks, and leaned on investors to accept bigger write-offs in a bond exchange. Ministers were discussing a Greek debt target of 121% of gross domestic product by 2020. (Bloomberg)

The European Commission’s preliminary estimate of consumer confidence rose to -20.2 in Feb from -20.7 in Jan, the second consecutive month of strengthening confidence and is in line with economists’ expectations. However, consumer confidence remains weak by historic standards, and below the long-term average of -12.7. (WSJ)

Euro-area central banks will swap Greek bonds in their investment portfolios for similar securities to avoid enforced losses during a debt restructuring, a euro-area official said. The swap is identical to one the European Central Bank carried out last week with the Greek bonds acquired in its asset-purchase program, where the new Greek bonds will be immune to collective action clauses, ensuring central banks do not incur any losses when a private-sector debt write-down takes place. (Bloomberg)

Greece hurried to finalise legislation tied to a huge eurozone bailout, with officials warning tough reforms mean a heavy workload and controversial constitutional changes. "We have only a few days ahead of us until the European Union summit (on 1-2 Mar) ... and we must do a lot of things in these few days. We must complete all the prior actions," Finance Minister Evangelos Venizelos said, asserting that "Greece is and will remain a eurozone member no matter what happens." (AFP)

US: Obama’s Treasury said to detail corporate tax plan tomorrow
The Obama administration will release details tomorrow on its proposal to reduce the 35% corporate tax rate and eliminate tax breaks, said administration officials familiar with the plan. The Treasury Department will outline the proposal, according to the officials, who briefed reporters on condition of anonymity. They didn’t discuss details of the administration’s proposal. Treasury Secretary Timothy F. Geithner said 15 Feb during congressional testimony that the administration would release a proposal that is “more than principles but less than fully articulated legislative language.” (Bloomberg)

20120222 0930 Global Market Related News.

Asia Stocks Fall on Oil, Greece Concern (Source: Bloomberg)
Asian stocks dropped for a second day on concern oil near a nine-month high will crimp economic growth and as investors warned that a Greece bailout won’t solve Europe’s sovereign-debt crisis. Canon Inc., the camera makers that gets 31 percent of sales from Europe, declined 1.9 percent in Tokyo. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, slipped 1.3 percent after bellwether Dell Inc. forecast first-quarter revenue that missed analysts’ estimates. “Even though Greece got the latest bailout, there are still a lot of hurdles to face,” said Shane Oliver, Sydney- based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The main driver for strength in recent times has been monetary easing around the globe or good economic data, and last night was pretty quiet on that front.”

Japanese Equities Advance as Oil, Metals Climb; Yen Continues to Weaken (Source: Bloomberg)
Feb. 22 (Bloomberg) -- Japanese stocks rallied from yesterday’s losses as commodity prices gained while the yen slid against most of its major counterparts, boosting demand for riskier assets. The Nikkei 225 Stock Average (NKY) rose 0.1 percent to 9,472.71 as of 9:03 a.m. in Tokyo. The broader Topix Index added 0.3 percent to 818.43.

U.S. Stocks Erase Gains After S&P 500 Advances to Highest Level Since 2008 (Source: Bloomberg)
U.S. stocks erased gains, after the Standard & Poor’s 500 Index failed to hold above its highest close since 2008, as approval of Greece’s bailout was offset by economic concern with crude oil jumping to a nine-month high. The Dow Jones Transportation Average (TRAN), a proxy for economic growth, slumped 1.5 percent as United Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL) dropped at least 7.2 percent. Wal-Mart (WMT) Stores Inc., the world’s biggest retailer, fell 3.9 percent as low prices hurt margins. Energy shares had the biggest gain in the S&P 500 among 10 industries as Chevron Corp. (CVX) rallied 1.6 percent. Macy’s Inc. (M), the second-biggest U.S. department-store chain, added 1.2 percent as profit beat estimates.
Eight stocks fell for every five rising on U.S. exchanges at 4 p.m. New York time. The S&P 500 gained 0.1 percent to 1,362.21, paring an earlier advance of 0.5 percent. The Dow Jones Industrial Average added 15.82 points, or 0.1 percent, to 12,965.69, after topping 13,000 (INDU) for the first time since 2008.

European Stocks Decline After Accord on Greek Bailout; U.S. Futures Gain (Source: Bloomberg)
European stocks fell from a six- month high amid speculation a Greek bailout deal won’t be sufficient to solve the nation’s debt crisis. CSM NV, the world’s biggest maker of bakery ingredients, tumbled 9.9 percent after reporting an unexpected loss. Segro (SGRO) Plc dropped 2.1 percent after writing down the value of peripheral assets. National Bank of Greece SA (ETE), the country’s largest lender, plunged 9.5 percent. The Stoxx Europe 600 Index (SXXP) lost 0.5 percent to 266.78 at the close of trading. The gauge has still rallied 24 percent since Sept. 22 amid speculation that the European sovereign-debt crisis will be contained and as U.S. economic data exceeded forecasts. The measure rose for a fourth day yesterday, climbing to the highest level since July 26.

Emerging Market Stocks Fall For First Time in Three Days on Greek Concern (Source: Bloomberg)
Emerging-market stocks dropped for the first time in three days on concern Europe will continue to struggle even after a second rescue package for Greece. The MSCI Emerging Markets Index (MXEF) lost 0.2 percent to 1,064.41 at the close in New York, retreating from a more-than six-month high reached yesterday. Mexico’s IPC Index (IPC) slid the most in a month as Genomma Lab Internacional SAB (LABB) fell to a four- month low on concern it may increase debt to make an acquisition. Russia’s Micex Index (INDEXCF) dropped the most in two months, while Turkey’s benchmark gauge declined for the first time in five days. European finance ministers approved a second bailout of 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default.
The nation’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicates.

Yen Falls in Longest Streak in Two Months; Euro Gains on Greece Bailout (Source: Bloomberg)
The yen fell for a fourth day versus the dollar, the longest losing streak in more than two months, as investors sold the Japanese currency to buy higher-yielding assets. The euro rose against the majority of its most-traded counterparts as Greece won a second international bailout and its government submitted debt-swap and austerity measures to the country’s parliament for approval. Gains in the dollar were limited as U.S. stocks rallied to the highest levels since 2008 before retreating. The yen has declined against all its major peers since Japan’s central bank increased its asset-purchase fund to 30 trillion yen last week. “As the market conditions calm down a little and we have less volatility, there is more interest in selling the yen against non-major currencies,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “What we’ve seen with dollar-yen has a lot to do with Bank of Japan easing.”

Euro off highs as Greek deal euphoria wanes
LONDON, Feb 21 (Reuters) - The euro held onto gains due to relief over Greece's securing of a rescue deal to avoid a chaotic default, but sceptical investors were looking to sell into a bounce on doubts whether it makes the country's debt burden any more manageable.
"It has been a relief rally for the euro, but there are so many caveats, so many risks to implementation," said Jeremy Stretch, head of currency strategy a CIBC World Markets.

Margins Gain at U.S. Companies as Wages Lag (Source: Bloomberg)
Companies are improving margins and generating profits as wage growth for the American worker lags behind the prices of goods and services. The year-over-year change in the so-called core consumer price index, which excludes volatile food and fuel, has outpaced hourly earnings for the last four months. In January, average hourly earnings climbed 1.5 percent from a year earlier, while core inflation was up 2.3 percent. “A lot of the outperformance of profits has been due to the fact that margins are expanding,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “Firms have been able to keep prices intact even though labor costs have been declining.” While benefiting the bottom line for businesses, the decline in inflation-adjusted wages bodes ill for the sustainability of economic growth as consumers may eventually be forced to cut back, Feroli said. Businesses have also been slow to redeploy their profits into new hiring.

Obama Admin to Detail Corporate Tax Plan (Source: Bloomberg)
The Obama administration will release details tomorrow on its proposal to reduce the 35 percent corporate tax rate and eliminate tax breaks, said administration officials familiar with the plan. The Treasury Department will outline the proposal, according to the officials, who briefed reporters on condition of anonymity. They didn’t discuss details of the administration’s proposal. Treasury Secretary Timothy F. Geithner said Feb. 15 during congressional testimony that the administration would release a proposal that is “more than principles but less than fully articulated legislative language.” He said the proposal would include a lower corporate tax rate and the elimination of dozens of tax breaks. The administration will propose retaining breaks that directly support investment in the U.S., he said.

Greek Rescue Leaves Europe Default Risk Alive (Source: Bloomberg)
Europe is still struggling to avoid the threat of default as investors warned Greece will soon risk violating the terms of its second bailout in three years. Seven months of negotiations ended in the pre-dawn hours in Brussels with Greece winning 130 billion euros ($172 billion) in aid it needs to avoid a March bankruptcy. Any respite may prove temporary after it signed up to a program of austerity and economic reform aimed at slashing debt to 120.5 percent of gross domestic product by 2020 from about 160 percent last year. Even with investors and central bankers chipping in to relieve the debt burden, economists from Citigroup Inc. to Commerzbank AG concluded Greece may again fail to deliver amid a fifth year of recession, looming elections and social unrest. The upshot could be the removal of aid and renewed debate over the merits of fresh assistance before year-end as policy makers shift toward doing more to inoculate the rest of Europe.

Euro-Area Central Banks to Swap Greek Bonds (Source: Bloomberg)
Euro-area central banks will swap the Greek bonds in their investment portfolios for similar securities to avoid enforced losses during a debt restructuring, a euro-area official said. The swap will happen today and is identical to one the European Central Bank carried out last week with the Greek bonds acquired in its asset-purchase program, the official said. The new Greek bonds will be immune to collective action clauses, or CACs, ensuring central banks don’t incur any losses when a private-sector debt write-down takes place, the official said on condition of anonymity. A spokesman for the Frankfurt-based ECB declined to comment.
Announcing a second bailout for Greece earlier today, euro- area finance ministers said part of the deal is for governments to contribute the equivalent of the profits their national central banks make on Greek bonds in investment portfolios. That will reduce Greece’s debt ratio by 1.8 percentage points by 2020 and lower its financing needs by about 1.8 billion euros ($2.4 billion), they said. Ministers didn’t say whether the bonds would be swapped for equivalent assets that are exempt from CACs.

Biggest U.K. Surplus in Four Years Pressures Osborne on Stimulus: Economy (Source: Bloomberg)
Britain posted the biggest budget surplus in four years in January, increasing pressure on Chancellor of the Exchequer George Osborne to provide some stimulus for the economy in his budget next month. Revenue exceeded spending by 7.75 billion pounds ($12.3 billion), compared with a surplus of 5.2 billion pounds a year earlier, the Office for National Statistics said today in London. The median of 10 forecasts in a Bloomberg News survey was 6.3 billion pounds. January is the biggest tax-collection month of the year. Osborne is refusing to bow to pressure from opposition politicians to relax his fiscal squeeze to promote growth when he presents his annual budget on March 21. Moody’s Investors Service said last week that while the U.K.’s Aaa rating was at risk from the crisis in Europe, the government’s commitment to deficit reduction supported the top grade.

Greece Wins Second Bailout as Europe Picks Aid Over Default (Source: Bloomberg)
Debt-stricken Greece won a second bailout after European governments wrung concessions from private investors and tapped into European Central Bank profits to shield the euro area from a precedent-setting default. Finance ministers awarded 130 billion euros ($173 billion) in aid, engineered a central-bank profits transfer and coaxed investors into providing more debt relief in an exchange meant to tide Greece past a March bond repayment. Stocks fell and the euro fluctuated as investors speculated the deal won’t fix Greece’s long-term challenges. Bondholders’ response to the swap, Greece’s tolerance of more austerity and a gantlet of parliamentary approvals in northern European countries gripped by an anti-bailout mindset loom as risks to the latest salvage operation.  

20120222 0929 Global Commodities Related News.

Commodities Rally to Highest in More Than Six Months on Bailout for Greece (Source: Bloomberg)
Commodities jumped to a six-month high as euro-area finance ministers reached agreement on a second debt bailout for Greece and U.S. equities rallied, boosting prospects for raw-material demand. The Standard & Poor’s GSCI Spot Index of 24 commodities rose 1.7 percent to close at 699.92 at 3:46 p.m. in New York, after reaching 700.79, the highest since July 27. Metals led the gains with silver up 3.7 percent and aluminum gaining 3.5 percent. The Dow Jones Industrial Average climbed above 13,000 for the first time since 2008. Greece won a rescue after governments in Europe wrung concessions from private investors and tapped the European Central Bank to shield the region from a default. Finance ministers awarded 130 billion euros ($173 billion) in aid. Investors who were waiting for a Greece resolution are “planting themselves long commodities,” said James Cordier of
“In the U.S., we have the Dow touching 13,000, and that is opening a whole lot of eyes to the fact that the U.S. economy is getting possibly much better,” Cordier, a portfolio manager, said in a telephone interview from Tampa, Florida. “You have investors really pouring money into the riskier assets and, of course, commodities get to be the big winner.”

Corn (Source: CME)
US corn futures end lower, stumbling on expectations of a large US crop and fund-selling. Traders say anticipation of the USDA's annual outlook forum later this week, and the likelihood it will forecast a big jump in corn acreage, weighed on prices. The market's inability to climb overnight despite outside macro support prompted selling, and funds were heavy sellers of an estimated 11,000 contracts, traders add. The market held above key 50-day and 100-day moving averages, however. CBOT March corn ends down 12 1/4c to $6.29 1/2 per bushel.

Wheat (Source: CME)
US wheat futures end lower on pressure from corn and large world supplies. The market sank along with corn, which was pressured by US acreage expectations. Traders say the US could also have a large wheat crop with adequate moisture this season. Regardless, world supplies are bulging and export demand is lackluster. CBOT March wheat ends down 11c to $6.33 per bushel, KCBT March wheat closes down 12 1/2c to $6.77, MGEX March wheat ends down 5 1/2c to $8.16 3/4.

Rice (Source: CME)
US rice futures stumble to their lowest level in a week amid broad weakness in grains and sluggish demand. Lackluster exports and domestic use have weighed on the rice market for months, but it had added pressure today from sliding corn and wheat caused by US acreage expectations. However, fears that US farmers won't plant enough rice is limiting the market's downside. CBOT March futures end down 30 1/2c at $13.83/hundredweight.

S.American drought, Russian exports in focus at grains meet
SINGAPORE, Feb 20 (Reuters) - A drought that has shrunk grain output in South America, slowing wheat exports from the Black Sea region and hopes for higher corn plantings in the United States will take centre stage at a global grains industry meeting in Singapore this week.
China's rising food imports and Australia's record wheat output -- which are likely to affect global supplies and prices -- are other issues that will dominate the conference.

U.S. wheat, corn, soy inch up; await USDA data
NEW DELHI, Feb 21 (Reuters) - U.S. grains edged higher the first day of trading after a long weekend, and traders expected prices to rise further as unfavourable weather limits supplies from the Black Sea region and South America.
"The market is relatively quiet after a long weekend and keenly waiting for the USDA outlook figure. At the moment, we are seeing strong export demand for U.S. wheat and lower supplies from Russia and Ukraine," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Canada 2011 farm income hits record high
Feb 20 (Reuters) - Canadian farmers recorded record-high net income in 2011, but their earnings are likely to slip modestly in 2012, Statistics Canada said on Monday.
In 2011, strong crop and livestock prices, combined with higher government payouts for flooding in western Canada more than offset higher operating expenses, Statscan said. Net cash income reached C$11.7 billion in 2011.

Record low rainfall puts UK on drought watch
LONDON, Feb 20 (Reuters) - Large parts of Britain are facing a drought this year after groundwater reached levels not seen for more than 35 years, which could spell restrictions for farmers and households.  
Rivers, canals and reservoirs are running low after a second dry winter in a row, with some areas receiving less than 70 percent of normal amounts.

Algeria wheat imports up 56 pct in January-customs
ALGIERS, Feb 20 (Reuters) - Algeria's soft and durum wheat imports rose 56 percent to 508,620 tonnes in January this year from 325,928 tonnes in the same month a year ago, customs data showed.
The data, seen by Reuters, did not provide details for wheat imports in January 2012, but showed 289,429 tonnes of soft wheat was imported in January 2011, while durum wheat imports reached 36,499 tonnes.

India 2011/12 pulses output seen lower-trade body
MUMBAI, Feb 20 (Reuters) - India could miss the 2011/12 estimated output target for pulses as lesser-than-usual winter rains have reduced moisture in the soil in key chana growing areas and affected sowing and harvesting, a senior official of an industry body said.  
India had hoped to produce 17.28 million tonnes of pulses in the current crop year ending in June. In 2010/11, it produced 18.24 million tonnes, a record high.

Russian grain exports slow in early Feb-IKAR
MOSCOW, Feb 20 (Reuters) - Total grain exports from July 1 to Feb. 12 amounted to 19.85 million tonnes, but the pace of exports dropped dramatically in the first two weeks of February, the Institute for Agricultural Market Studies (IKAR) said on Monday.
At the end of January, Russia had exported about 19.6 million tonnes, implying a monthly average of more than 2.74 million tonnes.  

Grain farms in China's northeast may see drought - ministry
BEIJING, Feb 20 (Reuters) - China's agriculture ministry has urged the authorities in the country's major corn and soybean growing northeast to be fully prepared for a possible drought in the spring planting period, which may delay or hurt crops.
"Since autumn, rainfall in the northeast has been 30 to 80 percent less (than in normal years), which has reduced water supplies to rivers and led to a shortfall of water storage in reservoirs," the ministry said during a meeting with local government officials.--

Favorable Prospects For Brazil 2012 Corn Crop, High Exports - FAO (Source: CME)
Early prospects for this year's Brazilian corn crop remain favorable despite dry weather, the United Nations's food body said, with the country's exports in 2011-12 forecast at a "high level" of 10 million metric tons. The Rome-based Food and Agriculture Organization said Brazil's 2012 corn production for both the main and second season crops is forecast at around 60 million tons, or an increase of 7% on the record level of 2011. The area planted for Brazil's second season corn crop is thought to have expanded significantly to compensate for an expected decrease in production from the South-Region, the FAO said, after the main crop experienced adverse weather. The FAO anticipates a good harvest from the second season crop--which is mainly grown in the Centre-West Region and in the southern state of Parana--with Mato Grosso likely to have registered a 29% increase in plantings.
A prolonged dry spell from November onwards negatively impacted yields for Brazil's main corn crop, the FAO said, with forecasts for a decline of around 11% on the year. However, the area planted for the main crop is estimated around 9% higher than the previous season in response to higher prices. Brazil's corn exports in the 2011-12 marketing year are forecast to remain well above the average of the last five years, the FAO said, but still decline around 14% on last year's record 11.7 million tons, partly due to growing feed demand from the domestic livestock industry. The FAO said prices of wheat flour and yellow corn in the main urban market of Sao Paulo declined by 7% and 5% on the month in February due to improved forecasts for the 2012 crop.

India Govt: Aim To Procure 31.89 Mln Tons Wheat In 2012-13 (Source: CME)
India is targeting a 12.6% increase in wheat procurement for government stocks to 31.89 million metric tons during the fiscal year that starts April 1, a government statement said. Wheat, one of the two most important grain staples, is usually sown between end-October and mid-November, and harvested from the end of April to early March onwards. State-run agencies procure the grain for government stocks between April and June. India has estimated that its wheat output during the crop year that started July 1 will touch a record 88.31 million tons. Two years of successive bumper wheat crops will enable the government to roll out an ambitious nationwide food security program that aims to offer the grain to the poor and malnourished at a fraction of market prices.

Pakistan May Match Record Wheat Export Volume On Bumper Crop (Source: CME)
Pakistan may export up to 1.5 million metric tons of wheat this year, matching last year's record, thanks in part to a third consecutive bumper crop expected from the harvest set to begin in a few weeks, a senior industry executive said. Output from the coming harvest is likely to total 24 million tons, almost unchanged from last year, due to good soil moisture, adequate use of fertilizer amid high farm incomes and fine weather throughout the planting and development stages, said Muhammad Najib Balagamwala, the chairman of Karachi-based Seatrade Group. Last year, Pakistan exported a record 1.5 million metric tons of wheat. That level may be reached again this year if prices remain competitive, Balagamwala said ahead of a grains conference here. The Pakistani government has raised the procurement price this year by PKR100 to PKR1,050 per 40 kilograms, or PKR26,250/ton.
Based on this price, Pakistan's export prices of the new harvest will be around $335/ton, free on board, which won't be competitive, Balagamwala said. Australia, the U.S. and Russia are offering wheat well below $300/ton. However, brisk exports are still likely because the government is holding at least 3.0 million tons of wheat from previous harvests, and may sell some of its stocks to traders and millers at lower prices to create storage space for the new harvest and bolster dwindling foreign exchange reserves, Balagamwala said. Not all growers have access to the government's grain-procurement machinery and prices in many regions generally fall below the intervention price due to the harvest pressure, thus boosting exports, he said. Pakistan enjoys a geographical advantage in shipping wheat to Southeast Asia and freight costs for container shipments are negligible.
Pakistan emerged as a major exporter last year because its wheat was among the world's cheapest in the May-July period but shipments slowed after Russia lifted a ban on exports. Ukraine, another major exporter, now plans to restrict exports due to concerns that bad weather will hurt its June-July harvest. Australia has ample supply but most of its shipping slots are fully booked due to strong demand. Many buyers looking for small volumes for prompt shipment and delivery at short notice may turn to Pakistan, Balagamwala said. Pakistan is currently exporting wheat after processing it into flour to several countries, including Sri Lanka and the United Arab Emirates, he said.

Wilmar International 4th Quarter Profit Gains 57% on Higher Sales, Sugar (Source: Bloomberg)
Wilmar International Ltd. (WIL), the world’s biggest palm-oil processing company, said fourth-quarter profit rose 57 percent on higher contributions from oilseeds, grains and its acquired sugar business. Net income climbed to $500 million, or 7.7 cents a share, in the three months ended Dec. 31, from $318.6 million, or 4.9 cents, a year earlier, the company said today in a statement. That compares with the $519.8 million average estimate of six analysts compiled by Bloomberg. Revenue gained 27 percent to $11.5 billion. Wilmar owns plantations and is the biggest palm oil refiner in Indonesia, where the maximum tax on crude palm-oil exports was cut in October and lower duties were imposed on products. The Singapore-based company completed the purchase of Australia’s largest sugar producer in December 2010 to help meet demand in Indonesia and India and rely less on China’s cooking oil market.
“We focused on strengthening our businesses through continued investments in sugar, flour and rice milling, oleochemicals, biodiesel, oil refining and consumer products,” Chairman Kuok Khoon Hong said in the statement.

Vietnam to export up to 150,000 T sugar in 2012
HANOI, Feb 21 (Reuters) - Vietnam will export 100,000-150,000 tonnes of sugar this year to help offset a domestic surplus as supply is expected to outstrip demand, the agriculture ministry said on Tuesday.
Domestic refined sugar output could reach 1.57 million tonnes, above expected demand of 1.4 million tonnes, the ministry's department for processing and trading agricultural and forestry products said on its website (

ISO raises 2011/12 global sugar surplus forecast
LONDON, Feb 20 (Reuters) - The International Sugar Organization on Monday increased its forecast for a projected global sugar surplus in 2011/12 to 5.17 million tonnes, up from a forecast of 4.46 million issued in its previous quarterly update.
World production in 2011/12 was seen at a record 173.00 million tonnes, up 4.9 percent from the previous season, with consumption climbing 2.3 percent to 167.83 million, the ISO said in a quarterly market outlook.

Rains lift hopes for Ivorian cocoa midcrop
ABIDJAN, Feb 20 (Reuters) - Rains picked up in Ivory Coast's main cocoa growing regions last week, lifting hopes for healthier production volumes during the April-to-September midcrop, farmers and analysts said on Monday.
Dry, windy weather has crimped output so far this season, with volumes already down about 8 percent from last year, according to exporter estimates.

Rain ruins part of Vietnam's 2012/2013 coffee-Vicofa
HANOI, Feb 20 (Reuters) - Rain and rough handling have ruined some coffee flowers in Vietnam, which could lead to a drop in the yields of the next crop, a Vietnamese industry executive said on Monday.
Vietnam, the world's second-largest coffee producer after Brazil, has ended harvesting the 2011/12 crop in January.

Ethanol Industry Tries To Work Off Supply Glut As Subsidy Ends (Source: CME)
A surge in U.S. ethanol production and falling export demand are driving down prices for the corn-based fuel, curbing producer profits and causing some plants to shut. Ethanol inventories ballooned late last year as producers rushed to take advantage of a government subsidy that expired Dec. 31. Around the same time, exports started to slide and domestic demand weakened for gasoline, with which ethanol is blended. Futures for the biofuel trade 11.6% below year-ago levels, closing at $2.215 a gallon at the Chicago Board of Trade on Friday. The weak market is expected to cut into the profits of ethanol makers such as Archer Daniels Midland Co. and privately held POET, LLC. Some producers are cutting output, with Green Plains Renewable Energy Inc. announcing last week it would reduce production by 30% at two of its nine plants and consider further cuts. "There is an overcapacity problem," Morningstar analyst Min Tang-Varner said. "It will take a couple of large plants shutting down to make a difference."
The U.S. has ethanol production capacity of 14.8 billion gallons a year, according to the Renewable Fuels Association. In the past week, producers have announced shutdowns totaling a combined 101 million gallons a year. Ethanol producers say the supply glut is a temporary issue the industry will burn through in the coming months. Still, returning to normal supply levels soon will require a combination of recovering export demand and a seasonal jump in domestic gasoline usage, said Sander Cohen, analyst at energy consultancy ESAI Inc. "The glut is more likely to stick around than go away," Cohen said. Fuel blenders had since 2004 enjoyed a subsidy that awarded them 45 cents for every gallon of ethanol they blended into motor gasoline, driving up demand for the biofuel. That subsidy expired at the end of 2011. Added production ahead of the subsidy's end helped build ethanol inventories to an all-time high of 21 million barrels during the first week of February, up 7% from a year ago, according to federal data.
Previous gluts have usually resolved themselves by demand growing each year as federal requirements for ethanol uses continued to kick in. But producers already are blending retail gasoline with 10% ethanol, leaving little room for additional gains under government mandates. So with domestic hunger for ethanol slowing, overseas demand will be a bigger factor in draining the glut, said Don Roose, president of U.S. Commodities, a Des Moines brokerage that advises ethanol plants. U.S. ethanol exports reached a record 1.2 billion gallons in 2011, more than triple the 2010 export total of 396 million gallons, according to the Renewable Fuels Association.
The export market may be losing steam, however. Official statistics for January aren't yet available, but ADM, Green Plains and the Renewable Fuels Association have all in recent weeks said they expect 2012 exports to fall by half as a weakened Brazilian currency gives importers there less buying power. About 40% of all U.S. ethanol exports went to Brazil last year. In one example of how low margins have fallen, Valero Energy Corp., the largest independent refiner in the U.S. and one of the largest ethanol producers in the U.S. by volume, saw profit margins in January dwindle to a "pretty weak" 5 cents a gallon or less, compared with 56 cents a gallon at the end of December, S. Eugene Edwards, Valero's chief development officer, said during a call with investors. The weak margins have some producers shutting capacity rather than losing money. Besides Green Plains Renewable Energy, several small producers have announced cutbacks recently. In addition, ADM said it would close down a small plant in North Dakota.
Still, producers aren't slowing down. Even with the closure, ADM says it will continue to operate at its full capacity of 1.72 billion gallons. ADM's Chief Operating Officer Juan Luciano was subdued about the industry in a recent earnings conference call, saying spot ethanol margins would remain "poor" until supply and demand rebalance, but that the company should see "a little bit of a pickup in the ethanol margin" by the end of the current quarter on March 31.

Oil Rises to Nine-Month High on Greece, Iran (Source: Bloomberg)
Oil increased to a nine-month high after Greece won a second bailout and Iran said it stopped selling crude to France and Britain. Futures rose 2.5 percent after the euro-area ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing debt relief, shielding the region from a default. Iran stopped selling oil to the countries yesterday, preempting a European Union ban, an official news website said. “There’s a lot of relief about the Greek situation in the market and Iran is making a lot of noises,” said Kyle Cooper, director of research at IAF Advisors, a Houston-based energy consulting company. “The Greek agreement has increased optimism about the economy.” Crude oil for March delivery gained $2.60 to $105.84 a barrel on the New York Mercantile Exchange, the highest settlement since May 4. Futures have risen 7.1 percent this year. The March contract expired at the close of floor trading.

Oil Drops in New York on Concern Greek Bailout Not Enough to Stem Crisis (Source: Bloomberg)
Oil fell on speculation that fuel demand will falter as Europe continues to struggle with its debt crisis and crude stockpiles rise in the U.S., the world’s biggest consumer of the commodity. Futures slid as much as 0.4 percent, after closing at the highest price in nine months. European stocks dropped and the euro surrendered gains yesterday as economists from Citigroup Inc to Commerzbank AG said Greece may again fail to deliver on pledged economic reforms after winning an 130-billion euro ($172 billion) international bailout. U.S. crude supplies probably climbed 1.5 million barrels last week, according to a Bloomberg News survey of analysts. Oil for April delivery decreased as much as 38 cents to $105.87 a barrel in electronic trading on the New York Mercantile Exchange. It was at $105.97 at 10:58 a.m. Sydney time.
The contract yesterday advanced $2.65, or 2.6 percent, to $106.25, the highest settlement since May 4. U.S. floor trading was closed on Feb. 20 because of the Presidents’ Day holiday and trades were booked with yesterday’s electronic transactions fro settlement purposes. Prices are 13 percent higher the past year.

Risk of reversal rises as oil enters "danger zone"
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Feb 20 (Reuters) - The chances of a sharp drop in oil prices similar to the record one-day fall on May 5 last year are increasing sharply as the market becomes locked into a classic price spike.
By close of business on February 14, hedge funds and other money managers were running 7.3 long futures and options positions linked U.S. crude prices (308 million barrels) for every short position (42 million barrels), according to commitments of traders data published by the U.S. Commodity Futures Trading Commission (CFTC).

EU pays price for oil sanctions on Iran
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Feb 17 (Reuters) - Businesses and consumers across the EU are starting to pay a financial penalty for the bloc's decision to ban crude oil imports from Iran.
Near record prices for crude oil in sterling and euro are compounding the misery many firms and households were already suffering as a result of the region's debt crisis and faltering growth.

China's Jan crude oil imports from Iran down 5 pct y/y-customs
BEIJING, Feb 21 (Reuters) - China's January crude oil imports from Iran fell 5 percent from a year earlier to 490,727 barrels per day (bpd), customs data showed on Tuesday.
January imports were 14 percent, or 82,000 bpd, lower than 572,761 bpd in December.
Japan, US near deal on Iran oil import cut, report says 11 pct
TOKYO, Feb 21 (Reuters) - Japan is close to agreement with Washington on the size of cuts refiners must make in imports of Iranian crude oil to win waivers from U.S. sanctions, two ministers said on Tuesday after a media report the two sides would settle on an 11 percent cut.
The Yomiuri newspaper, citing unidentified sources, said Japan and the United States reached an agreement at talks last week about the size of cuts to crude imports from Iran, with a formal deal expected by the end of this month.
Iran's fuel oil exports to E.Asia slump as sanctions bite
SINGAPORE, Feb 21 (Reuters) - Iran's fuel oil exports to East Asia for March are expected at a six-month low of 300,000-350,000 tonnes as tighter Western sanctions against Tehran make payments difficult, and volumes will fall further as a European Union embargo approaches, traders said on Tuesday.
Iranian exports made up nearly 8 percent of the 7-million tonne monthly inflow into East Asia, the world's biggest market for the product, last year. A further decline may boost prices above the three-year highs they hovered around in the past four months and keep them at elevated levels.

Oil steady near $120, buyers take less Iran oil
LONDON, Feb 21 (Reuters) - Oil held near $120 a barrel as world consumers grappled with supply disruptions ranging from Iran to Sudan to the North Sea.
"With its current regime, Iran is always going to be considered a hostile nation by the West, so the long term solution maybe for countries to wean themselves off Iran's oil supply where possible," Ben Le Brun, a Sydney-based markets analyst at OptionsXpress, said.

Record Nickel Supply Expanding Glut Thwarts Bull Market Rally: Commodities (Source: Bloomberg)
Mining companies and refineries are producing more nickel than at any time in history, expanding a glut that threatens to reverse this year’s rally. Production will exceed demand by 45,000 metric tons, a 73 percent jump from 2011, Barclays Capital estimates. That’s equal to 46 percent of stockpiles tracked by the London Metal Exchange. Refined output will rise 12 percent, the most in at least eight years, according to Morgan Stanley. Prices, which rose 8 percent to $20,230 a ton this year, may fall as much as 13 percent to $17,630 a ton by Dec. 31, the median of 11 analyst estimates compiled by Bloomberg shows.
Metals have returned to a bull market from a 22 percent slump last year on an improving outlook for global growth with manufacturing in the U.S. capping the biggest two-month increase in more than two years in January and unexpectedly gaining in China. With new supply expected from Australia to Madagascar to Brazil, consumption still won’t expand fast enough to absorb the extra metal. Most markets for stainless steel, accounting for 76 percent of nickel demand, remain “depressed,” Deutsche Bank AG said in a report Feb. 15.

Gold Imports by India Seen Dropping From Record to Make China Top Consumer (Source: Bloomberg)
Gold imports by India (INMOGOLD) are poised to decline for the first time in three years as rising prices deter jewelry buyers and investors, potentially allowing China to overtake the country as the world’s largest consumer. Purchases may drop 7 percent to 900 metric tons this year, according to the median estimate in a Bloomberg News survey of eight analysts, brokers and jewelers including Rajesh Exports Ltd. (RJEX), the biggest gold-jewelry exporter. India bought a record 969 tons in 2011, according to the World Gold Council. Bullion is climbing for the 12th year as investors seek a store of wealth amid volatility in stock markets, depreciating currencies and the threat of inflation. China’s consumption may surpass India this year after surging 20 percent to 769.8 tons in 2011, the council says. Use in India fell 7 percent to 933.4 tons last year as the currency slumped to a record low, cooling purchases for festivals and marriages.
“With the prices of gold going up, nothing fits into the budget of the customer,” Ramesh Pahlajani, partner at Mumbai- based Bherumal Shamandas Jewellers, said in an interview. “Demand for gold has been quite subdued.”

20120222 0929 Soy Oil & Palm Oil Related News.

The current upward trend in natural rubber and crude palm oil (CPO) prices will continue to sustain over the long term, says Rubber Industry Smallholder Development Authority (RISDA) chairman Tan Sri Rahim Tamby Chik. He was optimistic prices would sustain if both commodities do not depend on the export markets of Europe and the US but instead make further inroads into new emerging markets. (Malaysian Reserve)

Soybeans (Source: CME)
US soybean futures end higher, fueled by strong export demand and lingering uncertainty about South American production. Soybeans climbed to fresh four-month highs, able to withstand spillover pressure from corn and wheat. Ongoing concerns about smaller crop sizes in South America are attracting fresh export business, and with corn poised to grab more US acres from soybeans this year, traders are comfortable adding risk premium to prices, analysts say. CBOT March soybeans ended up 3 1/2c to $12.71/bushel. (

Soybean Meal/Oil (Source: CME)
Soy product futures end mixed, with soymeal unable to feed off the firm price theme in soybeans. Soymeal stumbled with other feed grains, garnering additional pressure from sluggish domestic demand, analysts say. Soyoil futures climbed, buoyed by strength in soybeans and crude oil futures. CBOT March soymeal ended down $2.30 at $330.20/short ton; March soyoil ended up 0.66c to 54.06c/lb.

Palm oil edges down; Greek deal limits losses
SINGAPORE, Feb 21 (Reuters) - Malaysian crude palm oil futures eased slightly on Tuesday as traders booked profits after the edible oil hit an eight-month high the previous day, although losses were limited by a Greek bailout deal.
"At the moment we have seen a bit of optimism as the European financial ministers have agreed on a Greek bailout," said Ker Chung Yang, an analyst at Phillip Futures in Singapore