Friday, February 24, 2012

20120224 1807 FCPO EOD Daily Chart Study.

FCPO closed : 3276, changed : +4 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned downward again, buyer taking profit.
Support : 3270, 3250, 3200, 3150 level.
Resistance : 3300, 3350, 3420, 3450 level.
Comment :
FCPO closed recorded tiny gain with declining volume changed hand. Soy oil price trading weaker after overnight closed recorded marginal loss while crude oil price surging higher.
Market swng between gains and losses awaits next Monday export data and some mild profit taking activities ahead of the weekend.
Chart reading remained suggesting a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120224 1727 FKLI EOD Daily Chart Study.

FKLI closed : 1562.5, changed : +5 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling, buyer reducing position.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded gain with higher volume participation doing 3.5 point premium compare to cash market that closed little higher. Overnight U.S. markets ended higher and today Asia markets traded higher while European markets currently registering gains.
Market sentiment turned positive after U.S. reported better jobs and housing data. Higher volume transacted today are partly contributed by rollover activities.
Daily chart study still 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.

20120224 1702 Regional Markets EOD Daily Chart Study.

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

20120224 1604 Global Market & Commodities Related News.

Shares inch up but growth worry caps
TOKYO, Feb 24 (Reuters) - Asian shares crept higher  as solid U.S. data improved sentiment, but gains may be limited by concerns that rising oil prices could deal a further blow to the fragile euro zone economy and moves to take profits after recent rallies.
"While the euro area crisis and high oil prices remain a worry, a better growth backdrop and risk premia that do not appear stretched lead us to look for an environment where global asset markets perform solidly," Barclays Capital analysts said.

FOREX-Euro hovers at 2-1/2 mth highs after short squeeze
TOKYO, Feb 24 (Reuters) - The euro hovered at 2-1/2-month highs on Friday, holding on to hefty gains made the day before after data on improving German business sentiment prompted traders to cover their short positions.
The single currency rallied 1 percent a day earlier, spiking well above the Ichimoku cloud on daily charts, and breaching its 90-day moving average after having failed to do so decisively in three attempts this week.

US wheat falls for 2nd day, higher acreage weighs
SINGAPORE, Feb 24 (Reuters) - Chicago wheat lost more ground, falling for a second day and on track for a weekly loss, as the market was weighed down by the U.S. government's projection of the largest acreage in three years.
"The sentiment is turning more bearish on grains, given the forecasts of larger acreage in the U.S., flattening ethanol demand growth, plenty of wheat," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Brazil exporter raises coffee outlook on robusta
BRASILIA, Feb 23 (Reuters) - Brazil's upcoming 2012/13 coffee harvest should turn out 53.9 million 60-kg bags, exporter Terra Forte said on Thursday, raising its November estimate by 1.4 million bags due to hopes for record robusta production.
The world's top coffee grower should begin picking its higher-output year harvest around May yielding supplies eagerly awaited by a coffee market running on low supplies of quality arabica beans after a run of disappointing harvests in Colombia.

IGC raises forecasts for global wheat, maize crops
LONDON, Feb 23 (Reuters) - Global wheat stocks at the end of the 2011/12 season look set to eclipse the previous record set more than a decade ago, the International Grains Council said on Thursday as it raised its forecast for production to an all-time high.
The IGC, in a monthly update, increased its forecast for world wheat production by five million tonnes to a record 695 million, partly reflecting higher estimates for Kazakhstan, India and Australia.

India Feb. 1 grain stocks higher than target -govt sources
NEW DELHI, Feb 23 (Reuters) - India's wheat stocks at government warehouses were 23.4 million tonnes as on Feb. 1, higher than the official target for the quarter ending March, government sources said on Thursday.  
Rice inventory for the same period was 31.8 million tonnes, far higher than the target of 11.8 million tonnes. The wheat stock target was 8.2 million tonnes.

Philippines may hike H1 rice output forecast by 1 mln T - official
MANILA, Feb 23 (Reuters) - The Philippines may raise its rice output forecast for the first half of the year by as much as 1 million tonnes due to changes in the cropping pattern, a farm official said on Thursday, making any unplanned grain imports unlikely this year.
The Bureau of Agricultural Statistics (BAS), an agency under the Department of Agriculture, is expected to come up with new production forecasts as early as next week, Assistant Secretary Dante Delima said.

Brent rises above $124 on Iran jitters, US data
SINGAPORE, Feb 24 (Reuters) - Brent crude rose above $124, on track for a fifth straight weekly gain, as worries over Iranian supply and upbeat U.S. economic data offset concerns that high oil prices could snuff out demand.    
"There's still a risk premium to be built in oil prices because of Iran," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

Copper rebounds, eyeing best week in a month
SINGAPORE, Feb 24 (Reuters) - London copper bounced back after two days of losses as upbeat U.S. data helped revive buying interest in the metal which is headed for its best weekly showing in a month.  Three-month copper on the London Metal Exchange  rose half a percent to $8,434.25 a tonne by 0124 GMT.

China 2012 copper concentrate imports seen up 10 pct -industry
HONG KONG, Feb 23 (Reuters) - China's imports of copper concentrate are expected to rise by about 10 percent in 2012 on strong smelter demand, curbing end-users' appetite for overseas purchases of the refined metal, traders and analysts said on Thursday.
Concentrate imports would rise to an average of about 580,000 tonnes per month this year, compared to 531,000 tonnes per month in 2011, a senior analyst at state-backed research firm Antaike, Yang Changhua, said.

Gold off 3-month high; dollar weakness supports
SINGAPORE, Feb 24 (Reuters) - Gold edged lower  , although a weaker dollar supported positive sentiment after upbeat economic data in the previous session weighed on the greenback and sent bullion to a three-month high.
"Technicals, along with the weakness in the dollar, lead to gold buying," said Peter Tse, director at ScotiaMocatta in Hong Kong.

Newcrest says 2012 prod guidance under pressure due to Lihir plant issues
SYDNEY, Feb 24 (Reuters) - Australian gold producer Newcrest Mining  said on Friday its 2012 production and cost guidance were under pressure due to production disruptions at its Lihir unit, though it still hoped to meet its targets.
Newcrest, which bought Lihir 18 months ago, said the plant was suffering from long-term underinvestment in plant maintenance. Technical trouble at the plant could adversely impact  March quarter production by 50,000 to 60,000 ounces, Newcrest said in a statement.  

METALS-Copper struggles as economic woes drag
SINGAPORE, Feb 24 (Reuters) - London copper erased early gains to trade weaker for a third session on Friday as a fragile global economy injected caution into the market, although the modest losses meant the metal is still headed for its best weekly showing in a month.
Copper is one of the best performing commodities so far this year having gained more than 10 percent, although investors are finding fewer reasons to stretch the rally with the European economy heading back into recession and manufacturing activity in top copper user China continuing to shrink.

PRECIOUS-Gold off 3-month high; dollar weakness supports
SINGAPORE, Feb 24 (Reuters) - Gold edged lower on Friday, although a weaker dollar supported positive sentiment after upbeat economic data in the previous session weighed on the greenback and sent bullion to a three-month high.
Gold was headed for a weekly rise of more than 3 percent, its biggest one-week gain in nearly a month, after rallying for four straight sessions to push through a key technical level, aided by macroeconomic data.

20120224 1106 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares inch up but growth worry caps
TOKYO, Feb 24 (Reuters) - Asian shares rose on Friday as solid U.S. data improved sentiment, but the upside may be capped by concerns that rising oil prices could deal a further blow to the fragile euro zone economy and moves to take profits after recent gains.
"The market will probably give Europe some benefit of doubt in the early months of the year as most were expecting weak data," Deutsche Bank said in a note dated Feb. 23.

COMMODITIES-Brent oil hits record in euro terms; gold extends rally
NEW YORK, Feb 23 (Reuters) - Brent crude hit a fresh nine-month high and a record in euro terms on Thursday as heightened tensions with Iran lifted oil markets and inflation fears sent gold to a three-month high.
"The issues around the euro zone translate into a much stronger dollar so Europe as a whole is not spared the rise in oil prices as it was back in 2008, when they enjoyed the buffer that their currency provided in relation to the price rise in dollar terms," said BNP commodity strategist Harry Tchilinguirian.

Myanmar plans new oil and gas tender, eyes Western firms
KUALA LUMPUR, Feb 23 (Reuters) - Myanmar will launch a global tender for six onshore oil and gas blocks as the reforming Southeast Asian country seeks to tap more foreign investment from the West, two Yangon-based sources with direct knowledge of the deals told Reuters.
The latest tender will be issued in late February or early March, according to the sources. It comes hot on the heels of Myanmar's largest oil and gas offering in August that saw 10 out of 18 onshore blocks snapped up, mostly by Asian firms.

European economies suffer regional oil shock
(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON, Feb 23 (Reuters) - The combination of surging oil prices and weak currencies is subjecting Europe's economies to a classic oil shock, which will add to the region's economic woes in 2012.
So far, strong currencies have blunted the impact on the United States, China and Japan. But the magnitude of oil-price rises, coupled with an expected recession in Europe, will probably cause growth to slow in these economies as well by mid-year.

Brent crude hits record high in euros
NEW YORK, Feb 23 (Reuters) - Brent crude rose for a fourth day, hitting a fresh nine-month high and a record in euro terms on Thursday, creating renewed concerns for cash-strapped Europe on heightened tensions between Iran and the West.
"Spread trading on WTI-Brent pushed up U.S. crude, which is also testing technical resistance here," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.  

US natgas futures end down slightly despite big stock draw
NEW YORK, Feb 23 (Reuters) - Front-month U.S. natural gas futures reversed course and ended slightly lower on Thursday, as mild weather forecasts into early March and record high supplies easily outweighed government data showing a weekly inventory draw above market expectations.  
"With winter winding down, today's mildly bullish natgas  inventory report was discounted immediately after its release as participants seemed to quickly focus on the bigger picture ... the oversupply is not going anyplace quick," Energy Management Institute's Dominick Chirichella said in a report.

Euro Coal-Prices stable despite oil modest gain
LONDON, Feb 23 (Reuters) - Prompt physical coal prices were little changed on Thursday on muted trading activity, and bid-offer spreads for fixed price cargoes widened by around $1, too far apart for trades to seem likely, utilities and traders said.
"The market's moved sideways, if anything, just looking at the wider spreads," one trader said.
Brent crude futures held on to gains, but U.S. crude dropped slightly after a government report showed a higher-than-expected rise in stocks.

20120224 1010 Local & Global Economic Related News.

The Ministry of International Trade and Industry (MITI) has proposed to amend or review the Promotion of Investments Act (1986) to boost the development of domestic investments, said secretary-general Datuk Dr Rebecca Fatima Sta Maria. The move is to allow domestic companies that are already in operation to avail themselves of the incentives and benefits. The idea is not to frustrate domestic companies but facilitate growth and transformation, she said. MITI has also proposed to review the criteria to allow more domestic companies to benefit from small-scale incentives by raising the preferential tax threshold for small and medium enterprises (SMEs) from RM500,000 to RM2.5m. Apart from that, MITI has also proposed to extend the Reinvestment Allowance to selected services sector, she said. Under MIDA, 60% of the 9,506 domestic manufacturing projects approved with tax incentives since 1980 were Malaysian-owned, said Rebecca.
As at 21 Dec 2011, total disbursement of incentives, including soft loans and grants provided to the SMEs, stood at RM636.5m. (Bernama)

China could face an economic crisis if it does not implement major reforms in the next 20 years, the Wall Street Journal said, citing a report by the World Bank and Chinese government researchers. The "China 2030" report, to be released next Mon, warns economic growth is at risk of a sharp and sudden slowdown, which could trigger a severe downturn in the world's second-largest economy. (AFP)

China has called for greater use of rare earths for its own domestic manufacturing, with the nation to "give full play to China's dominant position of rare earths resources to expand the scale of the rare earths new materials industry," the government said in a development plan for 2011-2015. (AFP)

The People’s Bank of China suspended its regular open market operation for the second straight week, thereby injecting funds into the market in Beijing's latest effort to keep money market liquidity conditions loose and provide support to the country's slowing economy. (WSJ)

The preliminary HSBC China Manufacturing PMI was 49.7 in Feb, compared with a final reading of 48.8 for Jan, HSBC Holdings PLC said. (WSJ)

Japan said it may provide up to US$50bn to the International Monetary Fund to help fight Europe's debt crisis, but the exact figure is yet to be decided. (AFP)

South Korean composite consumer sentiment index grew to 100 in Feb (98 in Jan), according to the Bank of Korea. (Bloomberg)

Singapore: Sees volatile inflation after slowing in Jan
Singapore said inflation will remain elevated and volatile in the next few months even after consumer price gains eased to the slowest pace since May.The Department of Statistics said the consumer price index rose 4.8% last month from a year earlier. The median estimate of 15 economists surveyed by Bloomberg News was for a 4.7% gain. The core inflation rate was 3.5% in Jan. (Bloomberg)

Indonesia: Higher fuel prices may hurt inflation target
Indonesia’s inflation may exceed the central bank’s target this year if the government raises prices of subsidized fuel by IDR1,000 (USD0.11) per liter or more, Governor Darmin Nasution said. The government will discuss its plan to raise fuel prices with parliament “soon” and any decision will be announced when it revises the 2012 state budget, Energy and Mineral Minister Jero Wacik said. He added the government will propose to increase the price of subsidized fuel by IDR500 to IDR1,500 per liter. An increase of IDR1,000 to IDR1,500 would mean “inflation will rise above our target,” Nasution told reporters in yesterday. Bank Indonesia targets inflation of 3.5% to 5.5% in 2012, and has said consumer prices may rise 5% this year if the government proceeds with a plan to limit the sales of subsidized fuel. (Bloomberg)

Global: India said to propose BRICS Bank to fund emerging nations
India has proposed setting up a multilateral bank that would be exclusively funded by developing nations and finance projects in those countries, two government officials with knowledge of the matter said. The plan has been circulated to the countries in the so- called BRIC group - Brazil, Russia, India and China - as well as to South Africa, an Indian government official said. A Brazilian government official confirmed the proposal. The plan will be discussed among developing nations alongside the meeting of Group of 20 finance ministers in Mexico City this weekend. (Bloomberg)

Australia: Gillard calls Labor leadership vote after Rudd resigns from post
Australian Prime Minister Julia Gillard called a leadership vote for 27 Feb, setting up a second showdown with her predecessor Kevin Rudd as weeks of growing tension damage the Labor government. “We need a leadership ballot in order to settle this question once and for all,” Gillard, the nation’s first female prime minister, said at a press conference, after Rudd yesterday resigned as foreign minister. The move aims to bring to a head 11 days of escalating rivalry between Gillard and Rudd, as opinion polls show Labor’s popularity is hovering near a record low. (Bloomberg)

Germany: Merkel signals she’ll keep austerity pressure on Greece after rescue fund
German Chancellor Angela Merkel indicated she will maintain pressure on Greece to meet debt- cutting pledges required for its second financial rescue, saying fiscal discipline is needed to hold the euro area together.Merkel’s renewed backing for European unity in the face of the debt crisis marked her first public comments since euro-area finance ministers signed off on Wednesday a 130bn-euro ($172bn) rescue for Greece aimed at averting the first sovereign default in the currency union’s 13-year history. (Bloomberg)

Germany: Business confidence increases to 7-month high
German business confidence rose more than economists forecast to a 7-month high in Feb as progress in taming Europe’s debt crisis tempered the risk of a recession. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in Jan. That’s the fourth straight gain and the highest reading since Jul. Economists predicted an increase to 108.8, according to the median of 38 estimates in a Bloomberg News survey. (Bloomberg)

Italy: Consumer confidence rose more than forecast in Feb
Italian consumer confidence rose more than economists forecast in Feb as an easing of Europe’s sovereign debt crisis buoyed household sentiment and the outlook for employment. The national statistics office Istat said that the confidence index rose to 94.2 from a revised 91.8 in Jan, which was a 16-year low. Economists forecast a reading of 92.1, according to the median of 10 estimates in a Bloomberg News survey. (Bloomberg)

Greece: IMF said to limit exposure at €30bn after new loan
An IMF official said that the organisation will seek to keep its exposure to Greece under a new bailout package at 30bn euros ($39.8bn), including money still owed from a previous loan. IMF MD Christine Lagarde has indicated that the fund’s credit to Greece after the second loan will remain at the maximum available under a 30bn-euro loan agreed in 2010, said the official, who spoke to reporters on condition of anonymity. About 10bn euros of the first loan hasn’t been disbursed, the official said. (Bloomberg)

Euro: EU confirms Spain 2012 recession, warns on further austerity
Spain’s economy will relapse into a recession in 2012 and additional austerity measures may worsen the slump, the European Commission said. Spain’s economy will contract 1% this year after expanding 0.7% in 2011, the commission said in a report yesterday. Spain’s deficit-reduction efforts are being hobbled by a slump in growth since the last quarter of 2011. The International Monetary Fund expects the fourth-largest economy in the euro area to contract 1.7% this year, its second recession in as many years, preventing the nation from meeting its budget goals. (Bloomberg)

EU: Economy to contract as Italy, Spain tumble
The European Commission said Europe’s economy will shrink in 2012, with Italy and Spain facing sudden crunches as they battle to escape the debt crisis.The 17-nation euro economy will contract 0.3%, the commission said, abandoning a Nov forecast of 0.5% growth. The downgrade was mainly due to projected contractions of 1.3% in Italy and 1% in Spain. (Bloomberg)

US: UK and Japan warn Volcker rule poses threat to recovery
The UK and Japan have urged the US to rewrite its so-called “Volcker rule”, claiming that trading restrictions on US banks could hit the international sovereign debt market at a delicate moment in the global recovery.George Osborne, the British chancellor, has joined forces with Jun Azumi, his Japanese counterpart, in warning in a column in  the Financial Times that the US banking reforms could make it  more difficult, costlier and riskier for countries to issue and distribute debt, at a time when many eurozone countries are already under strain. The article is the highest profile expression of international concern about the impact of the US reforms, coming from the finance ministers of two countries regarded as among Washington’s greatest economic allies. (Financial Times)

US: Home prices declined 2.4% in 4Q, FHFA says
US home prices fell 2.4% in the fourth quarter from a year earlier, as sales were boosted by investors seeking lower-cost distressed properties. Prices dropped 0.1% from the prior three months on a seasonally adjusted basis, the Federal Housing Finance Agency said yesterday in a report from Washington. In December, prices retreated 0.8% from a year earlier, while increasing 0.7% from the previous month. Foreclosures are boosting the supply of properties on the market and dragging down values for all houses. (Bloomberg)

US: Jobless claims hold at four-year low
The number of Americans filing first-time claims for jobless benefits last week held at a four-year low and consumers became more confident, indicating an improving labor market may boost household spending. Applications for unemployment insurance benefits were unchanged in the week ended 18 Feb at 351,000, the fewest since March 2008, Labor Department figures showed yesterday. (Bloomberg)

US: Obama seeks corporate tax rate cut
President Barack Obama on Wednesday proposed a lower corporate tax rate and an end to dozens of loopholes he said helps companies move jobs and profits overseas. The president wants to lower the corporate tax rate from the current 35%, the highest in the world after Japan. Under his plan, manufacturers would receive incentives so that their effective tax rate could be even lower. Obama's election-year plan would set a new 28% corporate tax rate, still  higher than the 25% rate sought by congressional Republicans. Obama said the framework will lower the corporate tax rate and broadens the tax base in order to increase competitiveness for companies across the nation. Corporations would have to give up dozens of cherished loopholes and subsidies that they now enjoy. Corporations with overseas operations would also face an unspecified minimum tax on their foreign earnings. (Bloomberg)

20120224 1004 Malaysia Corporate Related News.

Group bags RM5bn Malakoff deal
Malakoff Corp has awarded a RM5bn contract to build a power station in Johor to a consortium led by Alstom Power System SA. The consortium will help Malakoff build a new 1,000 MW coal-fired power plant, adjacent to its existing facilities at Tanjung Bin. Malakoff’s wholly-owned Tanjung Bin Energy Issuer yesterday signed the engineering, procurement and construction (EPC) contract with the consortium yesterday. Other consortium members are Alstom Services SB, Mudajaya Group and Eversendai Corp. (BT)

18 groups submit RFQ to EC for new Prai power plant bid
The Energy Commission (EC) will announce mid-next month the results of an international competitive bidding for the Prai combined cycle gas turbine power project, which has attracted 18 consortiums comprising local and foreign players, and sole bidders. The EC had received prequalification statements from 33 out of 38 participants who purchased the request for qualification (RFQ) documents on 31 Jan, it said in a statement on its website yesterday. (Malaysian Reserve)

Petronas, Gas Malaysia sign supply deal; awards LNG train contract
Petroliam National (Petronas) has signed a more than RM80bn (USD26.4bn) deal extending the supply of gas to Gas Malaysia for another 10 years. The new supply agreement, which offers the option to extend for another five years, was one of the requirements for Gas Malaysia to list on the local bourse this year, a source close to the deal to Reuters. Meanwhile, Petronas also awarded a contract for front-end engineering design (FEED) for its new production train at its LNG complex in Bintulu, Sarawak, to a Japanese engineering company, JGC Corp, and a Japanese-Italian partnership between Chiyoda Corp and Saipem S.p.A. The job, awarded under a dual FEED scheme, will see the two contractors compete in the FEED and engineering, procurement and construction price proposal for the project, known as Petronas LNG Train 9. (StarBiz)

Kenanga, ECM unit close to finalizing deal
ECM Libra Financial Group, whose substantial shareholders have long wanted to divest their equity, is close to signing an agreement to sell the group’s stockbroking and investment banking operation to K&N Kenanga Holdings, according to sources. Sources close to the negotiations told The Edge Financial Daily that Kenanga Holding will pay about RM900m for the stockbroking and investment banking business in ECM Libra via a cash and share swap deal. (Financial Daily)

Vincent Tan retires from Berjaya Corp
Berjaya group founder Tan Sri Vincent Tan, one of Malaysia’s best known tycoons, has announced his retirement as chairman of Berjaya Corp (BCorp). In a filing with Bursa Malaysia yesterday, BCorp said Tan had decided to retire from an active corporate role to focus on social and charitable activities. He had earlier handed over the CEO position to his son, Datuk Robin Tan, in January last year. Robin will hold the chairman’s post until the board finds a suitable candidate. (StarBiz)

Local firm eyes AK assets
A Malaysian company is said to be in talks to buy over all of tycoon T. Ananda Krishnan’s power assets in the country, South Asia, Egypt and the Middle East, in a deal that could be worth USD3.2bn (RM9.6bn) to USD3.6bn (RM10.8bn), sources said. “The transaction is in the works,” a source added. On Wednesday, Reuters reported that the assets could be worth USD2bn (RM6bn), but those in the know claim the valuations are higher. The value of USD3.2bn and USD3.6bn is based on the value of recent power transactions where the purchase price of each megawatt was about USD800 to USD900. (StarBiz)

IOI Corp: Posts RM1.19bn pre-tax profit for first 6 months
IOI Corporation posted RM1.19bn in pre-tax profit for 1H FY2012 down from RM1.351bn in  the same quarter last year. Revenue for the period rose to RM8.313bn from RM7.489bn. For  2Q FY2012, IOI Corp's pre-tax profit soared to RM76.819m from RM689.324m in the same  quarter last year. Revenue for the 3-month period also grew to RM4.165bn from RM3.970bn.  The company said the higher profit was mainly due to an increase in the group's overall  operating profit except for the property investment segment. (Bernama)

Nestle (M): Revenue rises 16.8%
Nestle (Malaysia) Bhd posted a net profit of RM456.3m for FY2011, against a revenue of  RM4.7bn. It said the increase of 16.8% in revenue was driven by strong sales performance in  both domestic and exports. The Nestle board has recommended a final net dividend of  RM1.25 per share. It said good domestic growth was noted across all categories with  stronger demand for milks, coffee and beverage, confectionery as well as liquid drinks. It also  noted that the strong global demand for commodities kept the prices of key raw materials  consumed at higher levels, reducing its gross margin by 40 basis points. (Business Times)

Axiata: 4Q FY2011 net income rises to RM544.6m
Axiata Group reported a net income of RM544.6m for 4Q FY2011, compared with a RM367m loss a year earlier. Revenue climbed to RM4.3bn in the quarter from RM4bn a year ago. It  proposed a higher dividend of 15 sen per share, up from 10 sen for the same period a year  ago. (Business Times)

SP Setia: Eyes RM60bn in development value
SP Setia is poised to hit RM60bn in GDV this year. SP Setia president and CEO Tan Sri Liew  Kee Sin said this would be helped by the launch of at least 4 big projects worth RM6bn in  GDV, said, who added that the company was confident of achieving its sales target of RM4bn this year. Liew said SP Setia had locked in sales of RM933m for 1Q FY2012. This represents a  27% increase over the RM737m achieved in the corresponding period of the previous year.  For FY2011, SP Setia exceeded the RM2bn mark for the second year running, ringing in a new  sales record of RM3.29bn. (Business Times)

MAS: Chief says stemming losses top priority
Group chief executive officer Ahmad Jauhari Yahya said the top priority for Malaysia Airlines  (MAS) now is to stem its huge losses and return to profitability soon, said, while it also strives  to regain its stature as a preferred premium airline with better services and newer aircraft.  He said the recent senior management shake-up and drastic route cuts were among the  many strategies aimed at turning around the national carrier from the FY2013-FY2014  onwards. (StarBiz)

YTL Corp: Net profit up 10.4% in 1H FY2012
YTL Corp has registered a net profit of RM489.2m in1H FY2012, up 10.4% from the previous  corresponding period. This was posted against a 10.8% growth in revenue to RM9.87bn.  Group MD Tan Sri Francis Yeoh said the increase in revenue was due mainly to the ongoing resilience of our multi-utility businesses in Malaysia, the UK and Singapore. He added that  overall, the group's cement and multi-utility operations, which are the major contributors,  continued to register sound performance. (Business Times)

Proton: Transfer to be completed in Mac, says Dr M
Proton’s transfer of ownership from Khazanah Nasional Bhd to DRB-Hicom will be completed  by next month, says the adviser to the national automaker, Tun Dr Mahathir Mohamad. The  former Prime Minister said by the given timeline, the new leadership will also be finalised.  Asked as to whether former Proton chief executive officer, Tengku Tan Sri Mahaleel Tengku Ariff would make a comeback as the company's new chairman, Dr Mahathir said as far as he  is concerned, there is no confirmation. (Business Times)

Media Prima: Profit down on negative goodwill
Media Prima posted a lower net profit of RM75.046m in 4Q FY2011 from RM88.2m a year  earlier. Revenue was higher for the quarter at  RM428.8m compared with RM411.27m  previously as most corporate clients utilised their advertising budget for the year 2011 and  also because of the effective cost management. Earnings per share were 7.15 sen against  8.95 sen. For the full year, Media Prima posted a slightly lower net profit of RM207.65m  versus RM242.3m in FY10 on the back of RM1.62bn revenue versus RM1.55bn. The lower net  profit for the full year was primarily due to the negative goodwill arising from the acquisition  of The New Straits Times  Press (M) Bhd, which was recognised in 2010. Group MD Datuk  Amrin Awaluddin said the group was cautiously optimistic for FY12's financial outlook as it  continued to monitor the economic situation in Europe and North America. (StarBiz)

Boustead Heavy: Net profit down in FY2011
Boustead Heavy Industries Corp Bhd (BHIC) has posted a net profit of RM18m for FY2011  against last year's profit of RM80m. The lower profit was mainly due to costs incurred in  connection with the completion of commercial shipbuilding projects, higher finance charges  and lower share of profits from associates. BHIC MD Tan Sri Ahmad Ramli Mohd Nor said the  group is venturing into aerospace maintenance. He said, with the receipt of the letter of  award to construct six more Littoral Combat Ships for the Royal Malaysian Navy, our  associate Boustead Naval Shipyard Sdn Bhd has intensified its mobilisation works. He added  that discussions to finalise the contract terms for these vessels are progressing well with the  various project stakeholders. (Business Times)

Green Packet: To invest RM300m as capex
Green Packet plans to invest RM300m in capex this year to sustain its continuing growth.  Group CEO Puan Chan Cheong said this year the company aims to widen its 4G coverage in  populated areas in Peninsular Malaysia to 65% from 50% currently. He added that the 4G  operator and service provider arm, P1, would also expand to Sabah and Sarawak by Jun.  (Financial Daily)

Hibiscus Petroleum: Calls for vote on Lime Petroleum
Hibiscus Petroleum is holding a EGM on 21 Mac to obtain approvals from its shareholders for  its 35% acquisition of Lime Petroleum plc. The EGM comes after the Securities Commission  approved Hibiscus Petroleum acquisition of the stake last week. (Financial Daily)

Oil & Gas: Petronas ups gas supply to Gas Malaysia under new deal
Petronas will increase the natural gas supply to Gas Malaysia to 534,143 Gigajoule (492m standard cubic feet per day (MMScfd). The agreement is for 10 years from Jan 1, 2013 has an  option for it to be extended by another 5 years. The new gas supply agreement will replace  the existing gas supply agreement which will expire on Dec 31, 2012 for a total gas supply of  382 MMScfd.  According to Gas Malaysia, the contract is aimed at providing a long term  supply security of natural gas to Gas Malaysia’s existing customers, while the additional 110  MMScfd will enable Gas Malaysia to expand its supply to new customers. (Financial Daily)

Oil & Gas: Petronas awards design for Bintulu project to JGC Corp, Chiyoda-Saipem JV
Petronas has awarded the contract for the front-end engineering design (FEED) for its Bintulu  LNG complex to JGC Corporation and Chiyoda Corporation-Saipem SpA partnership. The  contract, awarded under a dual FEED scheme, will see the two contractors compete in the  feed and in the engineering, procurement and construction (EPC) price proposal for the  project, known as Petronas LNG Train 9. Petronas also said the FEED was scheduled to be  completed in Dec 2012, where the winner will be awarded the project’s engineering,  procurement, construction and commissioning (EPCC) contract. The project is targeted to  meet its final investment decision (FID) by 1Q 2013 while its ready for start-up (RFSU) date is by 4Q 2015. (Financial Daily)

The new lending guidelines on hire purchase loans may not be reviewed or adjusted for now as the government needs more data before making any decision. Based on the Malaysian Automotive Association's (MAA) numbers, new vehicles sales plunged 25% yoy last month. It was partly attributed to stricter lending rules imposed by Bank Negara Malaysia (BNM) on Jan 1 this year, besides less working days as a result of the festive season. "That is MAA's numbers. I would need to verify the numbers with the Road Transport Department (JPJ). "Bear in mind that the industry recorded a growth of over 4% in 2011 despite the tsunami in Japan and floods in Bangkok, which disrupted supply," said Transport Minister Datuk Seri Kong Cho Ha.(BT)

US-based fund manager Capital Income Builder has emerged as a new substantial shareholder in Sunway REIT. Capital Income Builder has recently acquired 174.95m units in Sunway REIT, representing 6.5% direct interest in the latter. The transaction was done in the open market. (Starbiz)

Mark Ding Peng Peng, the controlling stakeholder and managing director of Xidelang Holdings Ltd (XDL), is a man with a mission - to change public perception of his company. "First of all, we are not a shoe company. I don't know why the media here keeps referring us as a shoe maker. We are a sports apparel company," said Ding, who flew down from China early this week. "Sports apparel, accessories and equipment contribute some 47% to our revenue now, and this is expected to grow in the coming years," said Ding in an interview with BT. "Let's face the fact. My company is valued in the market at 2x P/E. "How many companies making a pre-tax profit of above RM100m a year constantly have such low valuation?" said Ding. He said the negative perception on China companies has played a key role, but feels that the investment public here has gone overboard. "Even in Hong Kong, our bigger rival Anta Sports Products Ltd has a better valuation, trading at 9.8x P/E," said Ding. (BT)

Time DotCom's pre-tax profit for the FY2011, rose to RM119.0m from RM88.9m yoy. Revenue, however, dwindled to RM313.9m from RM321.1m. TIME dotCom said its profit from core operations improved 35% to RM48.9m from RM36.1m yoy on the back of 34% hike to RM119.0m in net pre-tax profit. CEO Afzal Abdul Rahim attributed the better performance to increased focus on higher margin business driven by a healthier product mix. This year, the company would further monetise its network and build on expanding its coverage in key market segments, he said. TIME dotCom said its proposed plan to position itself as a regional wholesale player by acquiring a group of companies has been approved. This would allow the company to offer complete network solutions to regional providers, it said in a filing to Bursa Malaysia. (Bernama)

HeiTech Padu has received a letter of award for the Emirates Vehicle Gate portal project in the UAE. The contract value is estimated at RM20.1m. (Starbiz)

20120224 0952 Global Market Related News.

Asian Stocks Rise, Headed for 10th Weekly Gain, on U.S. Jobs, Housing Data (Source: Bloomberg)
Asian stocks rose, sending the regional benchmark index toward its longest-ever streak of weekly gains, as U.S. jobs and housing data beat projections, boosting confidence the world’s largest economy is recovering. Samsung Electronics Inc. (005930), the world’s third-biggest maker of mobile phones, rose 0.9 percent in Seoul. Inpex Corp., Japan’s biggest energy explorer, advanced 4 percent in Tokyo after crude oil futures extended gains for a seventh day. Air New Zealand Ltd., the nation’s biggest carrier, slipped 1.1 percent after posting a 61 percent drop in first-half profit. The MSCI Asia Pacific Index (MXAP) rose 0.3 percent to 128.09 as of 9:56 a.m. in Tokyo, heading for its tenth week of advance, the longest run of weekly gains since the data began in 1988. The rally was powered by optimism Europe will contain its sovereign debt crisis, bets China will ease monetary policy and signs the U.S. economy is improving.
“If you can get better data on employment and housing, I think investors will be comfortable the recovery in the U.S. this time around has a better chance of surviving and thriving,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Improved risk appetite and improving economic fundamentals will create a catalyst that’s been lacking despite attractive valuations across a number of risk assets.”

Japan Stocks Swing From Gains, Losses on U.S. Data, Signs of Overheating (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Japanese stocks swung between gains and losses after U.S. jobs and housing data beat estimates while technical indicators showed the market may be overbought as the Nikkei 225 (NKY) Stock Average reached a six-month high yesterday. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 1.1 percent. Inpex Corp., the nation’s biggest energy explorer, rose 3.8 percent after crude prices reached a nine- month high. Kawasaki Kisen Kaisha Ltd. (9107) led shipping firms lower after the group closed yesterday at its highest since Aug. 8. The Nikkei 225 fell 0.2 percent to 9,581.38 as of 9:28 a.m. in Tokyo, set for a 2.1 percent advance this week. The broader Topix Index was little changed at 829.62, headed for 2.4 percent gain on the week.
“Investors are sensitive to short-term overheating in the market,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Japanese stocks are still far away from the level before Lehman’s collapse, and they remain pretty cheap when you think about earnings in the next fiscal year.”

Dow Average Rises to Highest Since May 2008 (Source: Bloomberg)
U.S. stocks rose, sending the Dow Jones Industrial Average (INDU) to the highest level since May 2008, amid better-than-estimated housing and jobs market reports. International Business Machines Corp. (IBM), which comprises 12 percent of the share-price weighted Dow, added 28 points to the index. Procter & Gamble Co. (PG) rose 3.1 percent as the largest consumer-products company said it will cut 5,700 jobs. PulteGroup Inc. and KB Home advanced at least 4.3 percent to pace gains in homebuilders. Sears Holdings Corp. (SHLD) soared 19 percent as it plans to raise as much as $770 million by selling 11 store sites and separating some smaller-format businesses.
The Standard & Poor’s 500 Index increased 0.4 percent to 1,363.46 at 4 p.m. in New York, erasing earlier losses. The benchmark gauge briefly rose above its April 2011 peak of 1,363.61 (SPX), which was the highest level since June 2008. The Dow gained 46.02 points, or 0.4 percent, to 12,984.69. The Russell 2000 Index (RTY) of small companies rallied 1.6 percent to 829.23.

European Stocks Decline on Economy Concern; Fiat Drops (Source: Bloomberg)
Stocks in Europe declined for a third day as the European Commission said the region’s economy will shrink this year, dragged down by Italy and Spain. Commerzbank AG (CBK) tumbled 6.6 percent after saying it won’t pay a dividend for 2011 and will ask investors to swap some hybrid instruments for shares. Fiat SpA (F) led a drop among carmakers. Swiss Re Ltd., the world’s second-biggest reinsurer, gained after raising its shareholder payout. The Stoxx Europe 600 Index (SXXP) lost 0.2 percent to 264.08 at the close of trading, after earlier rising as much as 0.4 percent and falling as much as 0.7 percent. The gauge has rallied 8 percent this year as euro-area leaders took measures to contain the region’s debt crisis and U.S. economic data topped estimates.
“The European Commission comments remind us that the situation in the eurozone is not good at all,” said Stephane Ekolo, chief European strategist at Market Securities in London. The earnings scorecard, which showed that one out of two companies in the region reported earnings below analyst estimates, also weighed on sentiment, he said. “Overall, the earnings season hasn’t been a good one.”

Emerging-Market Stocks Slip on Prospect Europe Crisis to Derail Exports (Source: Bloomberg)
Emerging-market stocks fell the most in a week as the European Commission said the region’s economy will shrink this year, dimming the outlook for exports from developing nations. The MSCI Emerging Markets Index (MXEF) retreated 0.5 percent to 1,059.26 at the close in New York, the biggest drop since Feb. 16. South Korea’s Kospi Index (KOSPI) fell 1 percent, led by Samsung Electronics Co. (005930), Asia’s biggest exporter of consumer electronics. PGE SA (PGE), Poland’s biggest power producer, tumbled to a three-month low as the government prepared to sell a stake, pushing the country’s benchmark gauge lower. Brazil’s Bovespa Index (IBOV) dropped for a second day, losing 0.4 percent. The 17-nation euro-region economy, the world’s second largest after the U.S, will contract 0.3 percent in 2012, the European Union’s executive body said today, abandoning a November forecast for 0.5 percent growth. Italy’s economy will shrink 1.3 percent and Spain’s 1 percent, the commission said.
“You’re being hit by a slowdown of demand from the rest of the world, particularly out of Europe, a major customer for many of the emerging markets,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private- banking unit of KeyCorp, said by phone from Cleveland. “Although you’ve alleviated the financial crisis, you haven’t alleviated the economic decline that seems to be unfolding.”

Euro Touches 10-Week High Versus Dollar (Source: Bloomberg)
The euro touched its strongest level in more than 10 weeks against the dollar before a German report forecast to show Europe’s largest economy expanded for an eighth quarter. The 17-nation euro is set for its longest weekly winning streak since April 2011 versus the yen as Group of 20 officials meeting this weekend may discuss committing further resources to Europe’s debt crisis. The yen is poised for a weekly drop against 16 major peers as volatility for currencies of Group of Seven nations fell to the least since 2008, spurring demand for higher yields. The dollar slid against Australia’s currency before U.S. data forecast to show growth in new homes sales. “The worry is about European growth, so a good German number will feed into what we’re seeing at the moment, that core Europe seems to be ticking on quite nicely,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “The technicals are pointing toward an initial euro target of $1.3425.”

Consumer Comfort Highest in Almost Four Years (Source: Bloomberg)
Consumer confidence in the U.S. increased last week to the highest level since April 2008 as more Americans had a favorable view of their finances. The Bloomberg Consumer Comfort (COMFCOMF) Index rose to minus 38.4 in the period ended Feb. 19, its fifth consecutive gain, from minus 39.8 the previous week. It marked the second straight week above minus 40, which is the level associated with recessions and their aftermath. Men, homeowners and households with annual incomes of more than $50,000 were the most optimistic in more than a year. A majority rated their personal finances as positive for the first time since July, indicating a rising stock market and job growth may encourage consumers to keep spending. At the same time, higher gasoline costs threaten to unravel the recent gains in sentiment, as occurred a year ago.

Jobless Claims Point to Improving Labor Market (Source: Bloomberg)
The number of Americans filing first-time claims for jobless benefits last week held at a four- year low and consumers became more confident, indicating an improving labor market may boost household spending. Applications (INJCJC) for unemployment insurance benefits were unchanged in the week ended Feb. 18 at 351,000, the fewest since March 2008, Labor Department figures showed today. The Bloomberg Consumer Comfort Index rose to minus 38.4 in the week to Feb. 19, the strongest reading since April 2008. “The labor market is better, and a stronger labor market and stronger consumer spending go hand in hand,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. “Consumers are going to continue to spend.”
The best January for the Dow Jones Industrial Average since 1997 has also boosted optimism among households, whose purchases makes up 70 percent of the economy. A majority of consumers rated their personal finances as positive for the first time since July, the comfort survey showed.

Home Prices Declined 2.4% in Fourth Quarter (Source: Bloomberg)
U.S. home prices fell 2.4 percent in the fourth quarter from a year earlier, as sales were boosted by investors seeking lower-cost distressed properties. Prices dropped 0.1 percent from the prior three months on a seasonally adjusted basis, the Federal Housing Finance Agency said today in a report from Washington. In December, prices retreated 0.8 percent from a year earlier, while increasing 0.7 percent from the previous month. Foreclosures (FORLTOTL) are boosting the supply of properties on the market and dragging down values for all houses. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said last month. Distressed properties, comprising foreclosures and short sales in which the lender agrees to a transaction for less than the mortgage balance, accounted for 35 percent of all existing- home purchases in January, the National Association of Realtors said yesterday.

RBA’s Stevens Says Monetary Policy at Right Setting, Sees Growth at Trend (Source: Bloomberg)
Australia’s benchmark interest rate is “about right for the moment” as economic growth is close to trend and concerns ease that Europe’s debt crisis will disrupt global output, Reserve Bank Governor Glenn Stevens said. “We do not, at this point, see the signs of the rapid collapse in global demand we saw three years ago,” Stevens said today in prepared testimony in Sydney to the House of Representatives Standing Committee on Economics. Stevens and his board unexpectedly kept the nation’s benchmark interest rate unchanged at 4.25 percent on Feb. 7 after making a quarter percentage-point cut Nov. 1 and another on Dec. 6. Three of 27 economists in a Bloomberg News survey predicted he’d pause this month, while the other 24 forecast a reduction to 4 percent. Australia has the highest benchmark borrowing costs among major developed nations. Policy rates in Japan and the U.S. are near zero, the European Central Bank has its benchmark at 1 percent, and New Zealand’s is a record-low 2.5 percent.

India Said to Propose BRICS Bank (Source: Bloomberg)
India has proposed setting up a multilateral bank that would be exclusively funded by developing nations and finance projects in those countries, two government officials with knowledge of the matter said. The plan has been circulated to the countries in the so- called BRIC group -- Brazil, Russia, India and China -- as well as to South Africa, an Indian government official said. A Brazilian government official confirmed the proposal. The plan will be discussed among developing nations alongside the meeting of Group of 20 finance ministers in Mexico City this weekend, the Indian official said, asking not to be identified by name as the proposal isn’t public and is in the early, exploratory phases.
“It would be a welcome thing if it actually happens as BRICS is the fastest-growing bloc in the world,” said Jay Shankar, an economist at Religare Capital Markets Ltd. in Mumbai. “These countries have tried to come together but they failed simply because, besides the aspiration of achieving higher growth, they don’t have anything in common.”

IMF Said to Limit Exposure to Greece at EU30 Billion After Second Loan (Source: Bloomberg)
The International Monetary Fund will seek to keep its exposure to Greece under a new bailout package at 30 billion euros ($39.8 billion), including money still owed from a previous loan, an IMF official said. IMF Managing Director Christine Lagarde has indicated that the fund’s credit to Greece after the second loan will remain at the maximum available under a 30 billion-euro loan agreed in 2010, said the official, who spoke to reporters in Washington yesterday on condition of anonymity. About 10 billion euros of the first loan hasn’t been disbursed, the official said. The IMF has yet to announce its share of the 130 billion- euro bailout package. With about $108 billion already promised to euro countries, including Portugal and Ireland, Lagarde must heed members’ calls to limit its commitments to the currency bloc, said Thomas Costerg, a European economist with Standard Chartered Bank in London.
“One of the main uncertainties of this Greek deal is the IMF participation,” Costerg said. “There’s some pressure from emerging markets and the U.S. to limit the IMF exposure to Europe, and it’s also a way to put pressure on Europeans so that they beef up their own existing rescue mechanism.”

Germany Confidence Defies Euro-Area Recession as Italy Contracts: Economy (Source: Bloomberg)
German business confidence rose more than economists forecast to a seven-month high in February as Europe’s largest economy bucks a recession that’s gripping the region’s southern fringe. The Munich-based Ifo institute said its German business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in January. That’s the fourth straight gain and the highest reading since July. Economists predicted an increase to 108.8, the median of 38 estimates in a Bloomberg News survey. The European Commission forecast that Germany’s economy will expand 0.6 percent this year, helping to mitigate a euro- area contraction of 0.3 percent. This “mild recession” is driven by the shrinking economies of countries buffeted by the sovereign debt crisis, led by Italy and Spain, according to the commission’s interim economic forecast, published today.

Euro-Region Economy Poised to Shrink in 2012 as Italy Contracts With Spain (Source: Bloomberg)
Europe’s economy will shrink in 2012, with Italy and Spain facing sudden crunches as they battle to escape the debt crisis, the European Commission said. The 17-nation euro economy will contract 0.3 percent, the commission said, abandoning a November forecast of 0.5 percent growth. The downgrade was mainly due to projected contractions of 1.3 percent in Italy and 1 percent in Spain. “The euro area has entered into a mild recession,” European Union Economic and Monetary Commissioner Olli Rehn told reporters in Brussels today after releasing the forecasts. “Prospects have worsened and risks to the growth outlook do remain, but there are signs of stabilization.”
Two days after Greece clinched a second bailout, the forecasts showed an economy pockmarked by the two-year-old fiscal crisis and looked set to stiffen resistance in southern Europe to further doses of German-demanded austerity.

EU Confirms Spain Will Relapse Into Recession, Warns on Further Austerity (Source: Bloomberg)
Spain’s economy will relapse into a recession in 2012 and additional austerity measures may worsen the slump, the European Commission said.  Spain’s economy will contract 1 percent this year after expanding 0.7 percent in 2011, the commission said in a report today. In November, the commission had forecast Spanish growth of 0.7 percent in 2012. “Additional fiscal measures in the forthcoming budget may significantly change the picture,” the commission said. Spain’s deficit-reduction efforts are being hobbled by a slump in growth since the last quarter of 2011. The International Monetary Fund expects the fourth-largest economy in the euro area to contract 1.7 percent this year, its second recession in as many years, preventing the nation from meeting its budget goals.
Private consumption will be “significantly weaker” this year, weighed down by austerity and “persistently high” unemployment, the commission said. Exports are expected to be “relatively resilient,” as inflation slows to 1.3 percent from 3.1 percent in 2011, falling below the euro-area average and improving the country’s price competitiveness.

German Business Confidence Climbs More Than Forecast to Seven-Month High (Source: Bloomberg)
German business confidence rose more than economists forecast to a seven-month high in February as progress in taming Europe’s debt crisis tempered the risk of a recession. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in January. That’s the fourth straight gain and the highest reading since July. Economists predicted an increase to 108.8, according to the median of 38 estimates in a Bloomberg News survey. Italian consumer confidence also rose more than forecast, a report showed today. Greece’s clinching of a second bailout package in Brussels this week and falling yields on government debt from Spain to Italy have buoyed investors’ optimism that the debt crisis has been shackled for now. The German economy, Europe’s largest, contracted less than forecast in the fourth quarter of 2011 and demand from abroad helped factory orders beat estimates in December, adding to signs the country can skirt a recession.

20120224 0951 Soy Oil & Palm Oil Related News.

Reuters :
Indonesia Trade ministry official keeps export tax for RBD Palm Olein at 8% for March 2012.
Indonesia Trade ministry official keeps export tax for Crude Palm Oil at 16.5% for March 2012. 

Soybeans (Source: CME)
US soybean futures rally to new five-month highs, fueled by technical buying and strong underlying export demand. The soybean market is in the midst of a bullish uptrend, a feature attracting buyers in the absence of bearish news. Export demand continue to fuel positive momentum, with the uncertainty of South American production and weakness in the US dollar serving as supportive influences on prices, says Chad Henderson, analyst with Prime Ag Consultants. The need for soy prices to remain competitive with corn and cotton to secure enough 2012 acres to maintain adequate supplies buoyed prices as well. CBOT March soy ended up 4 1/2c to $12.76 3/4/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures end mixed, with soymeal garnering support from traders taking profits on long soyoil/short soymeal spreads. The markets consolidated from recent spreading action, as traders shed risk before the end of the month, analysts say. CBOT March soymeal ended up $1.60 to $332.90/short ton, and March soyoil finished down 0.02c to 54.20c/lb.

Palm oil slips on concerns of slowing growth
SINGAPORE, Feb 23 (Reuters) - Malaysian crude palm oil futures edged down as optimism following a bailout deal for Greece faded and investor concern about slowing global growth curbed commodity demand, although losses were limited by recovering palm oil exports.
"Right now the market is tracking external markets and not so much on crude palm oil fundamentals, which are not too bullish or bearish," said James Ratnam, an analyst with TA Securities in Malaysia.

Paraguay could triple soyoil output, exports in 2013
BUENOS AIRES, Feb 22 (Reuters) - Paraguay, the world's fourth-biggest soybean supplier, could triple its production and exports of soyoil next year when two large processing plants come on line, industry analysts said on Wednesday.
The South American country, which currently exports most of its soy as raw beans, could crush up to 4 million tonnes in 2013 when Archer Daniels Midland , Bunge  and Louis Dreyfus are set to start operating their factories.

20120224 0951 Global Commodities Related News.

Corn (Source: CME)
US corn futures end mixed, with near-term contracts rising on export demand while deferred months slide on fresh planting forecasts. Export sales to China and unknown destinations helped nearby corn futures as near-term supplies remain tight, traders say. But supplies could balloon later this year as the USDA projected domestic corn acreage of 94M, up 2.2% from 2011. CBOT March corn ends up 1 1/4c at $6.39 1/2 per bushel while December falls to a 1-month low and finishes down 5 3/4c at $5.58 3/4.

Wheat (Source: CME)
US wheat futures end lower, with losses led by Minneapolis futures amid expectations for increased acreage. The USDA projects 2012 wheat acreage of 58M, up from a baseline estimate of 56.5M. While traders already knew of a hard-red-winter wheat increase, the USDA notes spring acres, traded in Minneapolis, will increase as well. Meanwhile, demand is lackluster and global supplies are ample. MGEX March wheat ends down 17 1/4c at $8.01/bushel while CBOT March drops 2 3/4c to $6.41 3/4 and KCBT March falls 5c to $6.80.

Rice (Source: CME)
US rice futures end slightly higher as the market extends its modest rebound but stays rangebound. Rice supplies are ample and demand lackluster, but worries about US acreage limiting losses. The USDA projected total US acreage of 2.8M, up 2.3% from a year ago but down from the government's baseline estimate of 3M released earlier this month. CBOT March rice ends up 4 1/2c to $13.96 1/2 per hundredweight.

U.S. wheat, corn, soybean lower ahead of USDA data
NEW DELHI, Feb 23 (Reuters) - Chicago wheat, corn and soybeans were lower  in line with a broader fall in global markets driven by concerns that Greece's debt crisis may plunge the euro zone into recession, but the fall was muted as the market awaits key USDA data.
"At the moment, the Chicago grains market is influenced by the outside market which has got some bearish bias," said Luke Matthews, a commodity strategist with Commonwealth Bank of Australia in Sydney.

Russia to keep wheat export volumes in 2012/13
SINGAPORE, Feb 22 (Reuters) - Russia will maintain export volumes of wheat and grain and may increase its grain output in 2012/13, while exports to Iran will continue until the government decides to ban them, Russian industry and government officials said on Wednesday.
The country expects to keep its wheat exports at around 22 million tonnes in the year to June 2013 with minimal damage to the winter crop so far from adverse weather, lobby group the Russian Grain Union said on Wednesday.

Port, rail capacity cap Kazakh grain exports to Iran
ASTANA, Feb 23 (Reuters) - Kazakhstan is maintaining grain supplies to Iran from its record post-Soviet crop, although volumes are constrained by limited port capacity and bad weather in the Caspian Sea, agricultural officials in the Central Asian country said this week.
Iran, an unpredictable wheat market participant, has bought more than 1 million tonnes of grain on world markets this month to meet an expected shortfall as Western financial sanctions restrict its ability to trade.

Kazakhstan 2011/12 wheat exports, output seen up-exporter
SINGAPORE, Feb 23 (Reuters) - Kazakhstan's 2011/12 wheat exports are seen at 10.5 million tonnes, up from 6 million tonnes a year ago, a Kazakhstan Food Company official said on Thursday.    
Wheat output for 2011/12 is seen at 19 million tonnes, up from 12.5 million tonnes a year ago, Zaripov Almaz, director of the privately owned Kazakhstan Food Company, told reporters at an industry meet.

Ukraine 2012/13 corn exports seen up 15-20 pct y/y
SINGAPORE, Feb 23 (Reuters) - Corn exports from Ukraine in 2012/13 are expected to rise about 15 to 20 percent from a year ago to between 14 million and 15 million tonnes, an official of the State Food and Grain Corp of Ukraine said on Thursday.
By the end of September, the country's corn stocks are seen at 4.7 million tonnes, up from 1.2 million tonnes a year ago, the state-run firm's Andrew Druzyaka told reporters.

Ukraine denies curbing wheat exports
KIEV, Feb 22 (Reuters) - Ukraine's government said on Wednesday it had not urged grain traders to limit wheat exports, denying local media reports it had done so, and it forecast that there would be no shortages of grain on the domestic market.
"There are no recommendations to limit wheat exports," Agriculture Minister Mykola Prysyazhnyuk told reporters.
"Traders are telling us they will not be able to export more than 300,000-500,000 tonnes of wheat a month and our balance (of exports and consumption) allows for that."

Indian rice exporters expect Iran sales credit soon
DUBAI, Feb 22 (Reuters) - Iranian rice importers could open letters of credit in Indian rupees to pay for Indian rice this week, the president of the All India Rice Exporters Association said on Wednesday.  
India said last week its exporters should be able to receive payments in the restricted rupee currency for sales to Iran to help maintain trade, despite U.S. banking sanctions.  

Ukraine sees grain harvest at 50 mln T - AgMin
KIEV, Feb 22 (Reuters) - Ukraine will harvest 42 to 50 million tonnes of grain this year, including 15-16 million tonnes of wheat, Agriculture Minister Mykola Prysyazhnyuk said on Wednesday, adding that this would be enough to meet domestic demand.
Ukraine harvested a record of 56.7 million tonnes of grain in 2011, including 22.3 million tonnes of wheat. But this year's winter crops have been hit by drought and extreme cold.

Agriculture Dept Economist Projects Cooling In Farm Economy (Source: CME)
U.S. farmers this spring will plant the largest corn crop since 1944, growing supplies and driving down prices for most field crops, the U.S. Agriculture Department Chief Economist Joseph Glauber said. The U.S. farm economy has been booming, enjoying strong prices and record returns last year. Glauber expects a slight pullback in 2012 as supplies grow, prices soften and demand cools. Still, he projected farm income for the year will be the second highest on record and crop prices will remain above historic levels. "Prospects for U.S. agriculture continue to be strong," said Glauber, speaking here at the department's closely-watched annual outlook conference. He expects U.S. farmers to plant 94 million acres of corn and 75 million acres of soybeans for harvest in the upcoming crop year, which runs from September 2012 to August 2013.
The corn projection was identical to the department's baseline forecast issued this month, but an increase from plantings last spring. Farmers sowed 91.9 million acres of corn in 2011. The projection for soy plantings was up from a baseline forecast of 74 million acres and even with plantings a year ago. Recent high corn prices have made farmers more likely to plant corn instead of soybeans, according to analysts. The baseline projections to which Thursday's projection are often compared were compiled in November as part of the government's budget process. Glauber's planting estimates largely met expectations with futures prices for corn and soybeans largely unchanged in morning trading at the Chicago Board of Trade. Still, shares of some farm suppliers, such as equipment makers Deere & Co. and Agco Corp., came under some selling pressure. Glauber in his remarks forecast an 11.5% decrease from 2011 in income from farming, giving growers less money to spend on a range of products from tractors to fertilizer.
As for prices, the economist said average corn prices are likely to be around $5.00 a bushel in 2012-13, down nearly 20% from the previous year. Soybean prices are projected to fall 2% to $11.50 a bushel in 2012-13. Helping to pressure prices is a weaker outlook for exports compared with a year ago and softening of corn demand by ethanol makers. Total U.S. agricultural exports are likely to be $131 billion in the 2012 fiscal year, the second-highest on record behind 2011, as higher global crop production brings down prices and export volumes, Glauber said. He added exports to China are likely to fall 15% due to concentration of trade in bulk commodities like soybeans and cotton. Glauber said corn use for ethanol is likely to continue its slide. The amount of corn that went into ethanol in the 2011-12 marketing year fell to 5 billion bushels from 5.021 billion in 2010-11. The figure is likely to fall by another 50 million bushels more to 4.95 billion bushels in 2012-13.
The rapid rise of ethanol production in the U.S. over the past several years has come to a halt. The expiration of U.S. ethanol subsidies on Dec. 31, 2011 could limit production of the fuel this year to the 13.2 billion gallons that is required by Congress under the U.S. renewable fuel standard, if producers can't sell at attractive prices without the subsidies, Glauber said. Strong foreign demand for U.S. ethanol pushed production higher in 2011, but that driver is expected to weaken, Glauber said. As for other major crops, farmers are likely to plant 58 million acres of wheat, up from the baseline projection of 56.5 million acres and 54.4 million last year. Cotton plantings will likely be 13 million acres, up from a previous baseline forecast of 12 million. Glauber's projections are not based on surveys of farmers. Wheat prices will likely fall 14% to $6.30 a bushel and cotton prices will likely fall 11% to 80 cents a pound, according to Glauber's presentation.
Livestock and poultry are expected to show strength in 2012. Glauber projected beef prices will rise 9% in 2012 to a high of $1.25 a pound, while chicken prices will climb 7% to 84.5 cents a pound. Milk prices, however, are expected to fall by 8.9%, while pork will see a slight 1.7% decline.

Argentina 2011-12 Soy, Corn Harvest Forecasts Steady - Exchange (Source: CME)
The Buenos Aires Cereals Exchange kept its soy and corn production forecasts unchanged in its weekly crop report, after rain in recent weeks soaked thirsty fields across much of the farm belt. Argentina is the world's third-largest soybean exporter and ranks No.2 in corn exports. The exchange maintained its 2011-12 forecast for the soy harvest at 46.2 million metric tons. Rains have allowed the developing soy crop to recover from drought conditions in December and January that caused permanent damage to the corn crop. The exchange said it still expects farmers to harvest 21.3 million metric tons of corn and 3.5 million tons of sunflower seeds this season. Exports of grains and soybeans, including related products like soyoil and soymeal, are a source of government tax revenue and a major contributor to Argentina's trade surplus, which totaled $10.35 billion last year.

Spring Flood Potential In Manitoba Seen As Low -Govt (Source: CME)
The 2012 flood outlook for the province of Manitoba shows spring flood potential remains low at this time for the Red and Souris rivers, and moderate on the Pembina and Assiniboine rivers, and in the southern Interlake. The Manitoba Infrastructure and Transportation Flood Forecast Centre's first 2012 flood outlook said spring flooding was likely in portions of northern Manitoba including The Pas, where there are above-average soil-moisture conditions and there has been significant snowfall this season. The forecast notes that significant precipitation this spring could result in localized flooding including some portions of the upper Assiniboine and Souris river basins, and in The Pas area. The spring flood potential is still very dependent on weather conditions from now until the spring melt, the centre said. The amount of additional precipitation, the timing and rate of the spring thaw, and the timing of peak flows in Manitoba, the US and other provinces will have a significant effect on flood potential.
There is a risk of significant precipitation leading to localized flooding, however, this is less likely to affect the main stems of the Red and Assiniboine rivers. The chances of minor, localized flooding during the early part of the run-off period due to ice jams or snow blockages in drains, ditches and small streams is fairly low, the centre said. Although major ice jams are unlikely to occur, the possibility cannot be ruled out, especially in the Interlake region. Recovery efforts for the 2011 flood are still ongoing including financial compensation programs. To date, more than C$500 million has been provided in flood recovery assistance through various programs such as disaster financial assistance, the Building and Recovery Action Plan, excess moisture insurance and AgriRecovery.

Ukraine May Sustain Corn Export Surge In 2012-13 (Source: CME)
Ukraine will likely export a record amount of corn for the second successive year in the marketing year that starts Oct. 1 due to a surge in output and large inventories, an official with a state-run company said. Corn is now the chief export among agricultural commodities and shipments in 2012-13 may rise to 14 million or even 15 million metric tons, Andrew Druzyaka, an advisor in State Food and Grain Corporation of Ukraine, said on the sidelines of a grains conference. Analysts cite Ukraine's corn exports as the most important check on global prices, which hit a record high in June last year due to dwindling inventories in the U.S, the top exporter. Ukraine's corn exports this year are forecast at 12.5 million tons, compared with 5 million tons in 2010-11, and stocks by end-September will surge to 4.7 million tons, Druzyaka said.
A major part of Ukraine's incremental farm acreage this year went to corn and yields were also above average, pushing output up to 22.8 million tons, almost double from 2011-12, he said. Corn acreage has increased by a third to 3.5 million hectares, he said. "Our corn prices are very competitive compared with U.S. and other origins and this has given a boost to sales," he said. In the October-December quarter, Ukraine sold 1.2 million tons corn to Egypt, around 700,000 tons to Spain and 363,000 tons to Iran. Subsequently, it sold 800,000 tons corn to Japan, its largest buyer in Asia, he said. Druzyaka said wheat output rose by 5 million tons to 22 million tons in the marketing year that started July 1, but exports are unlikely to be more than 6.0 million tons due to greater demand for corn. Exports reached 4.2 million tons in 2010-11, when output was hit by drought.
Consequently, wheat stocks are likely to surge to 7.4 million tons by end-June from 2.8 million tons, Druzyaka said.

U.S. Sees Bigger Corn Crop as Farms Boost Acres to 1944 High;Wheat Expands (Source: Bloomberg)
The U.S. corn crop may rise as farmers plant the most acres since World War II, easing pressure on higher food and fuel prices, the government said. Soybean planting may be little changed while wheat expands. Farmers will sow corn on 94 million acres, up 2.3 percent from last year and the most since 1944, Joe Glauber, the chief economist for the U.S. Department of Agriculture, said today at a conference in Arlington, Virginia. The forecast was less than the 94.329 million expected by analysts in a Bloomberg News survey, and unchanged from an estimate in the USDA’s 10-year baseline report, released Feb. 13. Rising corn output and slowing demand for use in ethanol may boost U.S. inventories of the grain that shrank to a 16-year low in the past year. Average corn prices received by farmers in 2012 will be $5 a bushel, down 19 percent from last year, while wheat prices will slide 14 percent and soybeans may drop 1.7 percent, Glauber said.

Wheat Declines as Global Stockpiles May Increase to Record; Soybeans Gain (Source: Bloomberg)
Wheat fell in Chicago on speculation world stockpiles of the grain will touch an all-time high by the current marketing year’s end in May. Inventories may reach a record 213.1 million metric tons in the period, U.S. Department of Agriculture figures show. Global stocks may come to 220 million tons in the coming 2012-13 marketing year, Mike O’Dea, a senior risk manager at INTL FCStone Inc., said yesterday. Prices are down 1.5 percent this year, partly on speculation inventories would swell. “The inventory outlook is quite stable compared to corn and soybeans,” said Nick Higgins, a London-based analyst at Rabobank International. Wheat for May delivery dropped 0.4 percent to $6.4325 a bushel by 1:15 p.m. London time on the Chicago Board of Trade, this week’s second decline. Milling wheat for May delivery traded on NYSE Liffe in Paris gained 0.1 percent to 206.25 euros ($247.27) a ton.

Indonesia to only import raw sugar in future - trade min
JAKARTA, Feb 23 (Reuters) - Indonesia, Southeast Asia's largest sugar consumer, will only issue import permits for raw sugar and not white sugar in future, as it seeks to refine more sugar as part of a drive to boost manufacturing, the trade minister said on Thursday.
"For the coming years, we plan to issue raw sugar import permits only, not white sugar or other kind of sugar," Trade Minister Gita Wirjawan told Reuters. "This is aimed at adding value locally."

Brazil cocoa arrivals statistics delayed by Carnival
SAO PAULO, Feb 22 (Reuters) - Due to the Carnival festivities in Brazil, domestic cocoa arrivals statistics will not be posted this week, said Bahia Commercial Association.
The data for cocoa deliveries to warehouses in Brazil from Feb. 13 to 19 and Feb. 20 to 26 will be released in the next report due out on Feb. 29.

Sugar becomes dominant Fairtrade product in UK
LONDON, Feb 22 (Reuters) - Sugar has become the UK's leading Fairtrade-branded product, accounting for a third of the entire sugar market, and is likely to extend its dominance over other commodities such as bananas, coffee and cocoa, the head of the Fairtrade Foundation said.
"Sugar is now the largest product in the Fairtrade range" by wholesale value, Harriet Lamb, the foundation's executive director, told Reuters in an interview, ahead of the Fairtrade Fortnight promotion, which runs from Feb. 27 to March 11.

Copper Traders Most Bullish in Two Months as Hedge Funds Buy: Commodities (Source: Bloomberg)
Copper traders are the most bullish in two months on speculation that demand will strengthen from the U.S. to China at a time when stockpiles monitored by the world’s biggest metals exchange are at a 2 1/2 year low. Fourteen of 29 analysts surveyed by Bloomberg expect the metal to gain next week and 10 were neutral, the highest proportion since Dec. 23. Inventories tracked by the London Metal Exchange are set for a fifth consecutive monthly drop and money managers have their biggest bet on rising prices since early August, Commodity Futures Trading Commission data show. Global equities and commodities climbed to at least six- month highs this week after euro-area finance ministers approved 130 billion euros ($173 billion) in aid for Greece to avert an economic collapse. China said Feb. 18 that it will cut banks’ reserve requirements to boost growth and U.S. indicators pointed last week to sustained economic expansion as Barclays Capital anticipates a third consecutive copper shortage this year.
“Copper is benefiting from very positive sentiment and from high levels of liquidity,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “It’s being driven by restrained supply and robust demand.”

Oil Heads for Longest Winning Streak Since January 2010 on Economic Growth (Source: Bloomberg)
Oil rose a seventh day, the longest winning streak since January 2010, as investors bet that fuel demand may climb after U.S. jobless claims held at a four-year low and German business confidence surpassed forecasts. Futures advanced from the highest close in more than nine months and headed for a third weekly gain. U.S. jobless claims were unchanged last week at 351,000, the fewest since March 2008, Labor Department data showed. Crude stockpiles at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil fell for the first time in five weeks, according to an Energy Department report yesterday. Oil for April delivery rose as much as 0.8 percent to $108.69 a barrel in electronic trading on the New York Mercantile Exchange and was at $108.61 at 10:45 a.m. Sydney time. The contract yesterday gained 1.5 percent to $107.83, the highest close since May 4. Prices are 5.2 percent higher this week and up 12 percent the past year.

Libya is template for releasing oil stocks in 2012
--John Kemp is a Reuters market analyst. The views expressed are his own. Repeat fixes link to related column--
LONDON, Feb 22 (Reuters) - The loss of oil supplies from South Sudan, Syria, Yemen and Iran satisfies all the conditions for member countries of the International Energy Agency (IEA) to release crude and products from government-controlled stockpiles.
For the time being, the agency seems content to wait, relying on offers of extra crude from Saudi Arabia and its Gulf allies to make up shortfalls left by Iran and other countries. The spring maintenance season, when refineries' crude consumption is traditionally weakest, buys the agency time to see if Saudi Arabia can fill the gap.

This year's supply-side oil rally risks hard fall-Campbell
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, Feb 22 (Reuters) - For the year running, oil markets have started off shooting higher on fears of a sudden shortfall in crude oil output but unlike last year, when robust demand kept oil product markets buoyant, leading products like Asian distillates are lagging.
Since the start of the year, Brent crude has risen more than 13 percent, driven higher by a combination of renewed optimism about the state of the global economy and fears that escalating tensions between Iran and the West may lead to war.

Threat to economy could force IEA to release oil: Kemp
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Feb 22 (Reuters) - Political leaders in the United States and Europe could soon face an uncomfortable choice between raising the pressure on Iran further or taking steps to safeguard their economies from the damage wrought by rising oil prices.
Confrontation with Iran and a series of supply disruptions in South Sudan, Syria and Yemen have pushed prices back to levels that derailed the recovery in the United States and Europe last year, and could do again in the first half of 2012.

Brent oil holds near $123 as Iran offsets economy worries
SINGAPORE, Feb 23 (Reuters) - Brent crude held steady near a nine-month high of about $123 as supply worries caused by eightened tension between Iran and the West offset concern that a slowdown in the global economy could curb oil demand.
"Any further news of escalating tensions in Iran or other Middle East or African countries will likely increase the risk remium, although our short-term view could be that prices could dip today on profit-taking as prices reach overbought erritory," said Natalie Robertson, a commodity strategist at ANZ bank.

Saudi Arabia says concern is to keep oil market well supplied
NEW DELHI, Feb 23 (Reuters) - Saudi Arabia's concern is to keep the global oil market well supplied, its deputy oil minister said on Thursday, as top Asian crude buyers look to the world's biggest producer to make up for cuts in supplies from sanctions-hit Iran.
Saudi Arabia is the only oil producer with significant spare capacity to replace a fall in supply from its regional rival Iran, which is facing Western sanctions aimed at crippling its contentious nuclear programme.

Tin Exports From Indonesia Seen Dropping to 2-Year Low as Rains Hurt Mines (Source: Bloomberg)
Refined-tin shipments from Indonesia, the world’s largest exporter, may decline in the first quarter to the lowest level in two years as monsoon rains disrupt mining, according to a Bloomberg News survey. Exports may drop 11 percent to 20,000 metric tons from 22,568 tons a year earlier, according to the median estimate in a survey of four company executives, an analyst and a trader this week. That’s the lowest for any quarter since the first three months of 2010 when sales were 19,975 tons, data from the trade ministry showed. Reduced shipments from Indonesia, which accounts for about 40 percent of global trade, may bolster this year’s 26 percent rally in London and boost earnings of producers including PT Timah (TINS), the world’s largest exporter. Rainfall in Bangka Belitung province, the main producing region, is hampering mining, according to Abrun Abubakar, corporate secretary at Timah.