Monday, February 27, 2012

20120227 1803 FCPO EOD Daily Chart Study.

FCPO closed : 3282, changed : +6 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3270, 3250, 3200, 3150 level.
Resistance : 3300, 3350, 3420, 3450 level.
Comment :
FCPO closed recorded tiny gain with better volume participation. Soy oil price trading lower after last Friday closed recorded small gain while crude oil price having downward correction after hitting 9 months high.
Better crude palm oil export data reported by 2 cargo surveyor, higher crude oil price and higher soybean export lifted FCPO to test 3300 level and closed recorded small gain.
Daily chart analysis revised to suggesting an 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.

20120227 1733 FKLI EOD Daily Chart Study.

FKLI closed : 1554.5, changed : -8 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling, buyer leaving and seller testing market.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded loss with ultra high volume distributed doing 4.5 point discount compare to cash market that closed nearly unchanged. Last Friday U.S. markets ended mixed and today Asia markets traded mostly lower while European markets currently trading in negative zone.
Burdening high crude oil price and concern that Greece will not be able to avoid a default as Germany’s parliament holds a vote on a second Greek aid package in Berlin today resulted global markets to retreat lower after recent rallies.
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.

20120227 1711 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.

20120227 1548 Global Market & Commodities Related News.

Oil hurts stocks, Europe hopes underpin euro
TOKYO, Feb 27 (Reuters) - Asian shares fell as high oil prices raised concerns about global growth, while signs of fresh steps from the Group of 20 major economies to contain the euro zone debt crisis underpinned the euro.
"A rise in oil prices drags the economy and weighs on growth around the world," said Bob Takai, general manager of Sumitomo Corp's energy division.

FOREX-Yen hits 9-month low vs dollar, euro holds firm
SYDNEY/TOKYO, Feb 27 (Reuters) - The Japanese yen slid to a nine-month low against the dollar on Monday as the break of a key chart level triggered stop-loss selling, while the euro held firm ahead of a fresh injection of liquidity by the European Central Bank.
The Japanese currency has retreated in recent weeks following a surprise easing by the Bank of Japan, a fall in the country's current account surplus and a rise in short-term U.S. bond yields.
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.

U.S. soy, wheat up; corn drops on record f'cast
NEW DELHI, Feb 27 (Reuters) - U.S. soybean futures rose on robust demand from China, while wheat gained despite Friday's higher output forecast by the U.S. Department of Agriculture.  
"There are a lot of orders for soybeans from China and most market participants believe the demand is going to be very strong in the days to come," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

Vietnam's 2012/2013 coffee output may fall 15-20 pct-Vicofa
HANOI, Feb 27 (Reuters) - Vietnam's coffee output from the next 2012/2013 crop may fall between 15-20 percent, hurt by the impact of rain on flowers and low yields provided by old trees, the Vietnam Coffee and Cocoa Association (Vicofa) said on Monday.
Vicofa did not provide any figures for its loss estimates, but it said in a statement that rain during the harvest in the Central Highlands caused early blossom and left "serious impact on output of the next 2012/2013 crop."

Vietnam's Feb coffee exports jump 38.9 pct y/y-Ag Min
HANOI, Feb 27 (Reuters) - Vietnam exported an estimated 200,000 tonnes, or 3.33 million bags, of coffee in February, a rise of 38.9 percent from a year ago, the Agriculture Ministry said on Monday, in line with market expectations.
But coffee shipments between last October and this month, the first five months of the crop year to September 2012, dropped 12 percent from the previous year to 570,500 tonnes, or 9.5 million bags, the ministry's data showed in its monthly report.

Vietnam's Jan-Feb rice exports down 26.6 pct y/y-Ag Min
HANOI, Feb 27 (Reuters) - Vietnam's rice exports in the first two months of 2012 dropped 26.6 percent from the same period of 2011 to an estimated 756,000 tonnes, the Agriculture Ministry said on Monday.
Rice-export revenue in January-February fell 16 percent from a year ago to an estimated $437 million, the ministry said in its monthly report.

Argentine farmers finish seeding soy, corn- gov't
BUENOS AIRES, Feb 24 (Reuters) - Argentine farmers have finished planting the 2011/12 soybean and corn crops, both of which suffered from a drought earlier in the season, the government said on Friday in its weekly crop report.
Argentina is one of the world's top exporters of corn, soybeans, soyoil and soymeal. The government forecasts soy production of 43.5 million to 45 million tonnes, and corn output of between 20.5 million and 22 million tonnes.

Argentine grains truck owners vow strike in March
BUENOS AIRES, Feb 24 (Reuters) - Owners of Argentine grain trucks vowed on Friday to strike starting March 19 to demand higher transport rates, a protest that could disrupt hauling during early corn and soy harvesting.
Argentina is one of the world's top exporters of corn, soybeans and soy products, most of which are moved to port by truck. Strike threats are common at this time of year as labor unions seek annual wage hikes.  
 
Brazil plans $38 bln to finance ethanol to 2015
SAO PAULO, Feb 24 (Reuters) - Brazil's government plans to direct 65 billion reais ($38 billion) in subsidized credit toward the expansion of sugarcane ethanol production through 2015, the Agriculture Ministry said on Friday.
The financing is intended reverse the drop in output of ethanol in Brazil, which fell sharply last year due to poor investment in the sector. The government said it wants the biofuel to accounts for 50-55 percent of the gasoline market.

Brent slips, stays above $125 on supply concerns
SINGAPORE, Feb 27 (Reuters) - Brent crude edged lower and snapped five days of gains, but stayed near 10-month highs above $125 due to concerns over supply disruption as tension rose over Iran's disputed nuclear programme.  
"Iran is the basis for the spike in oil prices," said Ben Le Brun, a Sydney-based markets analyst at OptionsXpress. "There seems to be some profit taking going on today, but prices are set to rise further as tensions over Iran don't look like they are going to subside anytime soon."

Oil price rise raises spectre of global recession
LONDON, Feb 26 (Reuters) - A jump in energy prices is jamming the slow-turning cogs of an economic recovery in the West, but that may be nothing compared to the economic shock an Israeli attack on Iran would cause.
Oil rose to a 10-month high above $125 a barrel on Friday, prompting responses from policymakers around the world including U.S. President Barack Obama, watching U.S. gasoline prices follow crude to push towards $4 a gallon in an election year.

LME copper slips, weaker global outlook weighs
SINGAPORE, Feb 27 (Reuters) - London copper futures fell for a third time in four sessions, hurt by a shaky outlook for industrial demand, with rising oil prices threatening a fragile global economy and Chinese consumption staying weak.
"The demand outlook isn't very good and it's mainly because of weak physical demand in China," said Grace Qu, analyst at CRU in Beijing.

Japan's Jan zinc exports up 49 pct on China
TOKYO, Feb 27 (Reuters) - Japan's exports of refined zinc surged 49 percent from a year earlier to 11,498 tonnes in January as shipments to China nearly tripled, customs-cleared data showed on Monday.    
Exports to China jumped to 2,973 tonnes, up from 1,050 tonnes a year before, accounting for a quarter of Japan's total exports.    

Japan Jan rolled copper output down 9.5 pct yr/yr
TOKYO, Feb 24 (Reuters) - Japan's rolled copper output fell 9.5 percent in January from a year earlier to a seasonally adjusted 63,637 tonnes, hit by sluggish demand from chip and electronics sectors, an industry body said on Friday.
It was the fourth straight month that output has plunged about 10 percent from a year earlier.  

COLUMN-Steel sector; China to the rescue?
(Andy Home is a Reuters columnist. The opinions expressed are his own)
LONDON, Feb 24 (Reuters) - Global steel production is experiencing its sharpest contraction since the dark days of 2009, when the industry was gripped by the manufacturing freeze that followed the 2008 financial crisis.  
Global output in January shrank by 8 percent year-on-year as the slowdown evident over the closing stages of 2011 accelerated and deepened.

Brazil steel sales up 5 pct; recovery seen waning
SAO PAULO, Feb 24 (Reuters) - Steel distribution companies in Brazil sold 5 percent more flat products in January than in the year-earlier period, an industry group said on Friday, signaling what is likely to be a short-lived recovery that loses momentum next month.
Distributors sold 356,600 tonnes of products last month, or about 9.8 percent more than in December, Sindisider, a group representing flat steel wholesalers, said in a report. The rise  helped push inventory of flat steel products 0.3 percent down to 997,900 tonnes last month, from December.

Japan's Jan zinc exports up 49 pct on China
TOKYO, Feb 27 (Reuters) - Japan's exports of refined zinc surged 49 percent from a year earlier to 11,498 tonnes in January as shipments to China nearly tripled, customs-cleared data showed on Monday.    
Exports to China jumped to 2,973 tonnes, up from 1,050 tonnes a year before, accounting for a quarter of Japan's total exports.  

Japan Jan copper exports up  15 pct, China sales up 50 pct
TOKYO, Feb 27 (Reuters) - Japan's exports of refined copper rose 15 percent in January from a year earlier as sales of cathodes to China continued to increase at a fast pace, Ministry of Finance data showed on Monday.  
Exports of refined copper -- which comprises cathodes, billet and others -- totalled 30,184 tonnes, though they were down from the previous month's 39,309 tonnes.      

Gold slips as Europe concerns linger; oil supports
SINGAPORE, Feb 27 (Reuters) - Gold prices slipped  , weighed by modest risk aversion across commodities as concerns about the euro zone remained, though high oil prices cushioned the slide.
"There is a softer turn across commodities after the G20 added to the risk anxiety," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.  

METALS-LME copper slips, weaker global outlook weighs
SINGAPORE, Feb 27 (Reuters) - London copper futures fell for a third time in four sessions on Monday, hurt by a shaky outlook for industrial demand, with rising oil prices threatening a fragile global economy and Chinese consumption staying weak.
Copper has risen more than 11 percent so far this year, but investors have been struggling to push it higher with poor demand from top copper consumer China and a debt-strained Europe countering upbeat U.S. economic data.

PRECIOUS-Gold slips as Europe concerns linger; oil supports
SINGAPORE, Feb 27 (Reuters) - Gold prices slipped on Monday, weighed by modest risk aversion across commodities as concerns about the euro zone remained, though high oil prices cushioned the slide.
Bullion prices rallied more than 3 percent last week, as investors took relief after Greece secured a bailout and expectations of further monetary easing boosted gold's appeal as a good inflation hedge.

20120227 1132 Global Market & Commodities Related News.

GLOBAL MARKETS-Hopes for Europe underpin euro, oil hurts stocks
TOKYO, Feb 27 (Reuters) - The euro gained broadly on Monday as signs of fresh steps from the Group of 20 major economies to contain the euro zone debt crisis boosted sentiment, but higher oil prices hurt stocks.  
"The affirmative nuance for beefing up the IMF's funding ability lit the fire on 'risk-on' trade, boosting the euro against the dollar and the yen," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo.

COMMODITIES-US crude has best week in 2 months; copper up too
NEW YORK, Feb 24 (Reuters) - Oil notched its biggest weekly gain in two months on Friday as worries about Iran deepened and drove U.S. crude prices up for a seventh session, while copper and most other commodities rose on a weak dollar.
"The supportive factors are on the supply side -- Iran and Iran and Iran, with a bit of Syria and Sudan," said Christopher Bellew, an oil broker at Jefferies Bache in London. "It would not be at these numbers if it was not for the supply-side problems."  

Brent jumps to 10-month high on Iran tensions
NEW YORK, Feb 24 (Reuters) - Brent crude futures settled near a 10-month high above $125 a barrel on Friday, posting a fifth straight weekly gain as heightened concerns over tensions with Iran about its nuclear program and cuts in supply sent oil prices up on both sides of the Atlantic.
"The supportive factors are on the supply side - Iran and Iran and Iran, with a bit of Syria and Sudan," said Christopher Bellew, a broker at Jefferies Bache in London. "It would not be at these numbers if it was not for the supply-side problems."

Mexico's January oil exports lowest since mid-2010
MEXICO CITY, Feb 24 (Reuters) - Mexico's oil exports in January were the lowest since mid-2010 as the state-oil monopoly diverted more crude to domestic refineries.
State-owned Pemex said Friday the country exported 1.191 million barrels per day in the first month of 2012, the lowest level in 19 months and a drop from the 1.282 million bpd shipped in December.

Oil price rise raises spectre of global recession
LONDON, Feb 26 (Reuters) - A jump in energy prices is jamming the slow-turning cogs of an economic recovery in the West, but that may be nothing compared to the economic shock an Israeli attack on Iran would cause.
Oil rose to a 10-month high above $125 a barrel on Friday, prompting responses from policymakers around the world including U.S. President Barack Obama, watching U.S. gasoline prices follow crude to push towards $4 a gallon in an election year.

Weather, supplies drive US natural gas futures lower
NEW YORK, Feb 24 (Reuters) - Front-month U.S. natural gas futures ended lower on Friday for a second day as mild winter weather forecasts and high supplies continued to pressure prices despite signs that the market may be tightening.
"Producers are making attempts to reduce production, and the power industry has increased demand for gas, but weather forecasts remain bearish," said Kyle Cooper, managing director of research at IAF Advisors in Houston.

Euro Coal-Trades sideways, producers seek $125 Newc
LONDON, Feb 24 (Reuters) - Prompt physical coal prices held steady on Friday after a day dominated by index-linked Q4 rather than fixed-price trades and despite a rise in oil and falls in gas and power.
"U.S. sellers want an FOB price of almost $100 but even if they had free freight, that's not going to work," a utility source said.

20120227 1039 Local & Global Economic Related News.

Malaysian exports are likely to see a lift in growth in 2H12, said Malaysia External Trade Development Corp (Matrade). Improvements can be expected from May onwards as the 1Q12 is seasonally a quieter period, it said. Matrade CEO Dr Wong Sai Lum expects Asia to provide the bulk of the trade volume, although she is encouraged by the economic recovery in the US. With developments in the global scenario, Matrade has projected merchandise exports to grow by 5-6% and services to expand by 4.9% this year. (BT)

South Korean inflation may accelerate above the government’s target of 3.2% on higher oil prices, just as the nation’s economic growth is about to start improving, Finance Minister Bahk Jae Wan said. A 10% increase in the cost of crude pushes inflation up by 0.12% pt. (Bloomberg)

Singapore’s industrial production increased 3.3% mom in Jan (8.9% in Dec), and fell 8.8% yoy in Jan (+25.2% in Feb). Economists had forecasts growth rates of 3.2% mom and -1.6% yoy. (Bloomberg)

Japan's credit rating would be reviewed if plans to double its sales tax rate are delayed further, Moody's Investors Service said, warning weak policy formation threatened efforts to curb the country's massive debt burden. Moody's did not plan to change Japan's Aa3 rating with a stable outlook for now, in part because the country's current account surplus helped offset its public debt. (Reuters)

The IMF predicts Thailand’s 2012 economic growth will register at 5.5% before growing further to 7.5% in 2013, according to IMF mission chief for Thailand Thomas Rumbaugh who also praised the fiscal stimulus policy that the government has been pursuing. (The Financial Post)

The Bank of Thailand expects to launch a master plan that will encourage more capital outflows to help balance fund flows, according to assistant governor Pongpen Ruengvirayudh who said, "The main focus is to promote Thai investment overseas, both portfolio and direct investment.” (Reuters)

The European Central Bank is preparing to flood Eurozone banks with cheap money again this week in the second of two such operations, aimed at preventing a credit crunch in the euro area. (Business Times)

G-20 finance ministers and central bankers deferred key decisions on international aid for Europe as they awaited more euro-zone action to contain the debt crisis. The group planned to issue a joint statement explicitly requiring expansion of the European rescue fund as a condition for increasing IMF resources to support Europe. (WSJ)


Japan: Yen down most in 2 years shows BOJ stimulus beating intervention
Bank of Japan Governor Masaaki Shirakawa’s inflation goal is succeeding where record intervention failed, as the yen heads for its steepest monthly drop in two years. The currency plunged to a seven-month low after the BOJ, which has struggled for more than a decade against deflation, said on 14 Feb it aimed for 1% annual gains in consumer prices and would add JPY10trn (USD123bn) to the economy. Traders are paying record premiums for options to buy the dollar against the yen for 3, 6 and 12 months. Bullish bets on Japan’s currency have fallen 70% from 31 Jan. Shirakawa needs a weaker JPY to help Japan export its way out of a recession made deeper by last year’s earthquake and the worst nuclear crisis in a generation. Oil and gas imports to replace lost capacity have reversed trade surpluses that made the currency a refuge in a slowing global economy. (Bloomberg)

China: May double rare earth exports as demand rebounds on price
China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand. Chinese exports were 49% of the government-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said. “Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said. “High prices last year had deterred purchases and led to inventories depletion. Smuggling also hampered exports through illegal channels.” Prices of rare earths have tumbled since the 3Q as consumers including makers of electric cars and wind turbines sought to reduce use. The average price of lanthanum oxide, a rare earth used in rechargeable batteries and refining catalysts, was RMB129,167 (USD20,508) a metric ton in the 4Q, 15% less q-o-q, according to data from Shanghai Steelhome Information. (Bloomberg)

India: Singh crowding out companies pushes rates higher
Indian companies are paying the highest borrowing costs in 11 months as the government’s record debt sales drain cash from the banking system. Three-month commercial paper yields surged 92 basis points this year to 10.75%, while similar rates in China slid 77 basis points and were unchanged in the US, according to data compiled by Bloomberg. Lenders in Asia’s third-biggest economy borrowed INR1.3trn (USD27bn) on average every day from the Reserve Bank of India this quarter to meet fund shortages, more than twice the maximum of INR600bn favoured by the central bank. A two-month rally in the nation’s benchmark bonds has slowed after Prime Minister Manmohan Singh’s administration boosted its borrowing program for the fiscal year to a level that is 23% higher than planned. (Bloomberg)

EU: G-20 Snubs Germany on IMF help as Europe funds deferred to April
Group of 20 nations rebuffed German-led calls to come to Europe’s rescue as it battles the sovereign debt crisis, saying any decision on outside help hinges on the euro area delivering more financial firepower within two months. G-20 officials meeting in Mexico City heeded US calls to defer a German bid to raise fresh money for the IMF that could be used to defuse the crisis. A euro-area review of its financial firewall against the crisis is “essential” before any consideration to “mobilize resources” for the IMF, according to a G-20 statement issued at the end of the summit. Progress will be assessed in April, when officials gather in Washington for the IMF’s Spring meetings, according to the statement. This is the second time in almost four months that the world’s biggest economies have declined to rally to Europe’s side, even as the IMF warns the crisis risks triggering another global recession. The spotlight now shifts to Germany, which is weighing whether to agree to beef up the region’s financial backstop to a potential EUR750bn (USD1trn) at a 1–2 March European summit. (Bloomberg)

US: Consumer sentiment in US reaches one-year high
Confidence among US consumers rose more than forecast in February, reaching a one-year high as Americans grew more upbeat about the outlook for the economy. The Thomson Reuters/University of Michigan final index of consumer sentiment increased to 75.3 this month from 75 in January. New-home sales last month were stronger than projected, another report showed. Three straight months of faster job growth along with a stock market rally since late 2011 are helping keep Americans optimistic in the face of rising gasoline prices. Further gains in confidence may sustain the household spending that accounts for about 70% of the economy. (Bloomberg)

US: Purchases of new US homes exceeded forecasts in January
Purchases of new homes in the US exceeded forecasts in January after climbing a month earlier to a one-year high, more evidence the housing market is stabilizing. Sales, tabulated when contracts are signed, fell 0.9% to a 321,000 annual pace from a 324,000 rate in December that was stronger than previously reported, figures from the Commerce Department showed. The median estimate of 77 economists surveyed by Bloomberg News called for a rise to 315,000. The number of homes for sale dropped to a record low. (Bloomberg)

20120227 1039 Malaysia Corporate Related News.

AK’s power assets draw 12 bidders
The power assets that billionaire Tan Sri Ananda Krishnan plans to sell have attracted 12 preliminary international and local bidders, with the final round of bidding expected by end of next month, sources said. The local bidders included IMalaysia Development Bhd (IMDB), and CIMB/EPF had submitted a joint bid, but the highest was from Saudi Water & Electricity Co at RM10.85bbn, sources told StarBizWeek. A total 18 parties had a look at the assets and the final round, where bidders would be shortlisted to three, will determine which party can fork out between USD3.2bn (RM9.92bn) to USD3.6bn (RM11.16bn), the price that Ananda is looking at. The USD3.2bn- USD3.6bn figure is based on recent asset sales where the purchase price of each megawatt was tagged at around USD800-USD900. “After the second round of bidding, about three parties will be shortlisted. They will then have to make a binding offer and show proof of funding,” a source said. (StarBiz Week)

Oriental privatization target?
Oriental Holdings Bhd, which had seen its share price jump by as much as 16.5% in the past week, could be the next privatization target. Sources said this followed several announcements of corporate moves which would probably be a prelude for greater things to come. “This will always catch the market by surprise. The buying of the Kingsley Hotel for about RM202m is definitely a pointer to bigger things to come for Oriental,” a source said. It is learnt that Oriental's single majority shareholder, Boon Siew SB, may decide to privatize the company to strengthen its position as part of efforts to regionalize the company. Boon Siew SB, founded by the late Tan Sri Loh Boon Siew, has a 43% stake in the company. Today, it is controlled by Loh's family, which is said to be also undergoing a leadership transition very soon. (StarBiz Week)

Vincent Tan to relist 7-Eleven, MOL to raise RM600m
Berjaya Group founder Tan Sri Vincent Tan will relist 7-Eleven Malaysia Bhd and its MOL Internet business next year to raise more than RM600m combined. Tan said he may relist MOL Global Bhd in Malaysia or Singapore, or go for a dual listing as its business is internationally focused. MOL, which is said to have about 1% stake in Facebook Inc, the world’s largest social networking service company, operates in Malaysia, Singapore, Indonesia, the Philippines, Thailand, India. It is also making inroads into Turkey, Brazil and Vietnam. “MOL is fairly profitable and has good growth currently. As for 7-Eleven, the company will be listed on its own, unlike previously,” Tan said at an event on Saturday. (BT)

MBM seeks assembly partner
Automotive group MBM Resources is shoring up cash to expand into the auto assembly business, for which it already has a licence. Looi Kok Loon, MBM Group MD, told The Edge Financial Daily, “We have already acquired a license and are in negotiations with several brands which are interested in partnering with us to assemble cars in Malaysia,” The license to assemble automobiles was picked up by the group when it acquired Kinabalu Motor Assembly SB from an Sri William Cheng’s Lion Group in 2010. It bought a 70.1% stake in the company from Lion Corp and Lion Forest Industries Bhd. (Financial Daily)

Silverbird to face Bursa, SC
It is a glaring anomaly when a listed company is late in producing its audited accounts. Therefore, it will be no surprise to see senior executives of Silver Bird Group Bhd and representatives of its external auditors at the Bursa Malaysia and Securities Commission (SC) buildings this week following the company's announcement on Friday that it could not meet the 29 Feb deadline for the issuance of its audited financial statements for the year ended 31 Oct 2011. “It's a given that we (the Silver Bird management and auditors Crowe Horwath) will have to engage with the authorities over the next few days to explain the circumstances behind the delay,” says a source close to the matter. “The reason for failing to issue the outstanding financial statements within the relevant timeframe is due to the company needing more time to resolve audit queries raised by the auditors on 22 Feb.” (StarBiz)

Massive Equity Sdn Bhd’s proposal to takeover QSR Brands Bhd and KFC Holdings Bhd may have hit some obstacles, according to sources. It is understood that US-based Yum! Brands Inc, which owns the Kentucky Fried Chicken and Pizza Hut franchises, is concerned about the large amount of debt that Massive Equity will need to raise for the takeover exercise. Also, Yum! Brands is concerned that Massive Equity may not have the financial resources to grow the business. According to sources, negotiations for the takeover, as a result of the high debt levels are still ongoing albeit at a slower price. “There is some level of concern as Yum! Brands is worried about future expansions. How Massive Equity plans to fund an expansion while taking on such a high debt level is its main concern,” says a source. According to insiders, however, Massive Equity’s business plan could see it setting up 30% more outlets than what KFC has done over the past 10 years, in a short span of time. In a possible turn of events, institutional investors might also come on board at Massive Equity, which could see CVC Capital Partners reducing its stake from the current 49%. This would also help to reduce Massive Equity’s borrowings. However, this plan to have institutional investors come in is still fluid, with many loose ends. The Edge understands that Yum! Brands is looking at the coupon repayments of a seven-year tenure of JCorp’s new RM3.2bn debt papers and are asking where the funds for the expansion of KFC and other franchises will come from. “Yum Brands gets certain payments, or makes money from each store opened, which explains its enthusiasm at the number of stores. JCorp,on the other hand, is looking at profitability, which is why the two parties are at loggerheads,” the source says. (Edge)

RHB Capital Bhd and OSK Holdings Bhd are expected to announce this week the highly anticipated merger between RHBCap's banking business and OSK Investment Bank Bhd (OSK IB), which would create the country's largest brokerage by trading value and volume, sources said. "An announcement to Bursa Malaysia will be made later this week, and subject to relevant approvals, the merger transaction would be completed in the first half of this year," a source said. (The Sun Daily)

SP Setia is making its first foray into Sabah with the RM2bil project called Aeropod. The project will be implemented over five phases in a span of about eight to 10 years. When fully completed, Aeropod being built on a 24ha site, would feature three hotels, nearly 28,000 sq m of retail space, some 5,000 residential units as well as the new Sabah Railway Department headquarters. The Aeropod would not only serve as a railway station but would also be geared for the future by being built to accommodate mass rapid transit (MRT) or monorail services. (Starbiz)

Automotive players are apparently not happy with the outcome of their dialogue with Bank Negara Malaysia last Friday to help resolve issues related to the new lending guidelines. After the nearly two-hour meeting, Bank Negara appeared to focus more on the implementation of the new ruling, and less on the ruling itself, Proton Edar Dealers' Association (Peda) said. The Malaysian Automotive Association (MAA) last week said new vehicle sales in January had dropped 25 per cent or a whopping 13,833 units to 40,948 units, from 54,781 units in the same month in 2011. Peda's president, Armin Baniaz Pahamin said the approval rate for vehicle financing in January was only 30 per cent although Bank Negara's official records show a 54 per cent approval. (BT)

Akashi-Kikai Malaysia, a joint-venture firm set up by Daihatsu Motor Co Ltd with its subsidiaries Akashi-Kikai Industry Co Ltd of Japan and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will build an electronic automatic transmission (E-AT) manufacturing plant in Seremban, Negeri Sembilan. Akashi-Kikai Malaysia will put in RM100m capital for the project. The JV company will have a production capacity of 150,000 units a year. (BT)

China Stationery Ltd (CSL) plants to invest RM10.78m to strengthen its brands by increasing advertising and promotional activities to create further awareness. Its executive chairman Chan Fung @ Kwan Wing Yin said the company would launch two new patented products this year. The company made its debut on the Main Market of Bursa Malaysia last Friday at 98 sen. (Malaysian Reserve)

KPJ Healthcare Bhd is preparing to attract more foreign patients to grow its medical tourism business. The company is the country's largest private medical entity with a network of 20 hospitals nationwide. (Financial Daily)

Selia Pantai Sdn Bhd is exploring strategic partnerships with domestic and foreign investors to fast track the development of its on-going SouthKey project. Managing director Datuk Mohamed Zaini Amran said the company was currently negotiating with several reputable developers from Malaysia and Singapore for partnerships. (Starbiz)

20120229 1033 Global Market Related News.

Asia Stocks Swing Between Gains, Losses (Source: Bloomberg)
Asian stocks swung between gains and losses after oil’s longest rally in two years raised concern higher energy costs will weigh on economic growth and as the yen’s decline boosted the outlook for Japanese exporters. Korean Air Lines Co., the nation’s biggest carrier by market value, sank 3.2 percent in Seoul. Newcrest Mining Ltd. (NCM), dropped 3 percent in Sydney after JPMorgan Chase & Co. cut its rating on the Australia’s largest gold explorer. Sony Corp. (6758) gained 3.3 percent as the yen fell to a nine-month low against the dollar. The MSCI Asia Pacific Index (MXAP) rose less than 0.1 percent to 127.99 as of 10:49 a.m. in Tokyo after falling as much as 0.5 percent. The index advanced for a 10th week last week, its longest run of gains since data started being collected in 1988. Shares rose amid confidence China will ease monetary policy and signs the U.S. economy is improving.
Japan’s Nikkei 225 Stock Average (NKY) rose 0.5 percent after the yen touched 81.67 per dollar today, the lowest level since May 31. A weaker yen boosts exporters’ overseas earnings when repatriated. Australia’s S&P/ASX 200 Index slid 0.7 percent. Australian Prime Minister Julia Gillard defeated former leader Kevin Rudd in a leadership ballot, leaving her to unite the ruling Labor party and revive poll ratings before elections due in 2013.

Japan Stocks Advance as U.S. Economic Data Raises Confidence in Recovery (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average advancing for a third week, after U.S. jobs and housing data beat estimates, boosting confidence in the global economic recovery. Sony Corp. (6758), Japan’s leading exporter of consumer electronics, rose 3 percent. Inpex Corp. (1605), the nation’s biggest energy explorer, led stocks in the sector higher after crude prices advanced for a seventh day. Yaskawa Electric Corp. (6506) slipped after a report that AIJ Investment Co., a company that manages some of its money, could not account for 200 billion yen ($2.5 billion) in client funds. The benchmark Nikkei 225 gained 0.5 percent to 9,647.38 as of the 3 p.m. trading close in Tokyo, rising 2.8 percent this week. The broader Topix Index climbed 0.6 to 834.29, its highest close since Aug. 2.
“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 economic fundamentals will create a catalyst that’s been lacking despite attractive valuations.”

S&P 500 Advances to Highest Level Since June 2008 After Economic Reports (Source: Bloomberg)
U.S. stocks rose this week, driving the Standard & Poor’s 500 Index to the highest level since 2008, after Greece got a bailout and better-than-expected data boosted confidence in the world’s largest economy. Energy companies surged 1.9 percent, the most among 10 S&P 500 (SPXL1) industries, as crude oil futures exceeded $109 a barrel. Sears Holdings Corp. (SHLD) rallied 25 percent, the most in the S&P 500, after announcing real estate sales and a rights offering. Technology companies in the stock index advanced an eighth straight week even as Hewlett-Packard Co. (HPQ) tumbled 10 percent. Procter & Gamble Co. added 2.8 percent after saying it will cut 5,700 jobs. The S&P 500 added 0.3 percent to 1,365.74, the seventh gain in the past eight weeks. It exceeded last year’s high of 1,363.61 as a 24 percent rally since October restored $3.2 trillion to American equity values. The Dow Jones Industrial Average (INDU) climbed 33.08 points, or 0.3 percent, to 12,982.95.
The measure exceeded 13,000 for the first time since 2008. “You’re seeing a whiz of optimism mainly because of a lack of negative news out of Europe and moderate growth in the U.S.,” Matt McCormick, who helps oversee about $5.1 billion at Bahl & Gaynor Inc. in Cincinnati, said in a phone interview. “This trend will continue until either of these two variables change.”

European Stocks Post Loss on Greece Austerity Measures, Euro-Area Growth (Source: Bloomberg)
European stocks fell this week on investor concern about Greece’s ability to implement austerity measures needed for a second rescue package, and as the European Commission said the euro area’s economy will shrink this year. National Bank of Greece SA paced declines in banks, sliding 18 percent. Commerzbank AG, the second-biggest German lender, dropped more than 6.6 percent after asking investors to swap hybrid capital instruments for new shares. TNT Express NV, the Dutch express-delivery service, rose 48 percent after rejecting a takeover offer from United Parcel Service Inc. The Stoxx 600 (SXXP) slipped 0.4 percent to 264.77 this week after reaching 268.16 on Feb. 20, the gauge’s highest level since July 26. The benchmark measure has rallied 23 percent from its low on Sept. 22 and 8.3 percent this year as investors speculated euro- area policy makers will contain the sovereign-debt crisis.
“Investors have been hesitant as European politicians face parliamentary votes to pass the bailout for Greece which also faces another general election in April,” said Hans Peterson, the Global Head of Investment Strategy at SEB Private Banking in Stockholm. “Markets are in a waiting position.”

Frontier Stocks Lose in Best Rally Since ‘91 (Source: Bloomberg)
The best start to a year for stocks in two decades is leaving the smallest markets behind, a sign of reduced investor confidence in the least-developed economies. All nine of the world’s worst-performing equity indexes this year are in frontier countries, where the average stock- market value of $30 billion is about 95 percent less than in emerging nations. While the MSCI All-Country World Index (MXWD) jumped 11 percent, gauges in Bangladesh (DHAKA) and Sri Lanka (CSEALL) sank at least 8 percent as interest rates increased. Nigeria’s stock index fell 1.1 percent after union strikes and attacks by Islamic militants. Frontier-nation stocks trade at the lowest valuations since at least 2008 versus emerging-market shares. Falling valuations reflect concern that growth in the smallest economies, which expanded about 20 percent slower than larger developing nations on average during the past three years, won’t accelerate in 2012.
Bank Julius Baer & Co. says the losses create buying opportunities for long-term inves tors. Ashmore EMM LLC has been cutting frontier-market holdings and Oversea-Chinese Banking Corp. (OCBC) is avoiding the stocks.

Consumer Sentiment in U.S. Reaches One-Year High on Jobs Outlook: Economy (Source: Bloomberg)
Confidence among U.S. consumers rose more than forecast in February, reaching a one-year high as Americans grew more upbeat about the outlook for the economy. The Thomson Reuters/University of Michigan final index of consumer sentiment increased to 75.3 this month from 75 in January. The median estimate in a Bloomberg News survey called for 73, after a preliminary reading of 72.5. New-home sales last month were stronger than projected, another report showed. Three straight months of faster job growth along with a stock market rally since late 2011 are helping keep Americans optimistic in the face of rising gasoline prices. Further gains in confidence may sustain the household spending that accounts for about 70 percent of the economy.
“The overwhelming fact is that the job market has gotten better,” said Bill Cheney, chief economist for John Hancock Financial Services Inc. in Boston, who projected a gain. “People are back to spending most of the additional income that they get, so as employment increases and you get some meager increases in wages, they do feed through to more spending.”

Treasury Gain Slows on Speculation Report to Show Pending Home Sales Rose (Source: Bloomberg)
Gains in 10-year Treasuries slowed before an industry report forecast to show pending home sales rebounded in January after sliding in December. U.S. government securities have fallen 0.8 percent in February as the economy shows signs of improvement, heading for their first monthly loss since October, based on Bank of America Merrill Lynch data. Pending home sales rose 1 percent, recovering from December’s 3.5 percent slide, according to the median forecast in a Bloomberg News survey of economists before the National Association of Realtors reports the figure today. Ten-year yields were little changed at 1.97 percent as of 10:31 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security maturing in February 2022 changed hands at 100 1/4. The rate declined three basis points, or 0.03 percentage point, last week.
“Housing is bottoming out and starting to recover,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “Yields around 2 percent are too low given inflation pressure and the economic recovery.” Manufacturing probably accelerated for a fourth month in February, consumer confidence improved and Americans picked up the pace of spending in January, economists forecast separate reports this week will show.

U.S. Treasuries Halt Three-Week Downturn on European Debt Crisis Concerns (Source: Bloomberg)
Treasuries rose, with 30-year bonds halting a three-week slide, amid concern Europe’s rescue package for Greece won’t fully resolve the region’s sovereign-debt crisis. U.S. 10-year yields reached the lowest in a week yesterday as Fitch Ratings lowered Greece’s credit rating and said a default is highly likely, fueling refuge demand. The U.S. sold $99 billion in notes while the Federal Reserve bought $3.8 billion in longer-term Treasuries. The difference between the yields on 10-year notes and inflation-indexed securities was close to the highest since August before a report that is forecast to show U.S. manufacturing output expanded in February.
“We started the week with optimism that an agreement was in place in Greece that would take some pressure off that European crisis, but any selloff was met with buyers as it turns out nothing has really changed,” said Larry Milstein, managing director in New York of government trading at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “There is still a lot of uncertainty, and the Fed is still buying, which is giving support to Treasuries.” Yields on 30-year bonds fell five basis points, or 0.05 percentage point, this week to 3.10 percent, according to Bloomberg Bond Trader prices. The 3.125 percent securities maturing in February 2042 increased 30/32, or $9.38 per $1,000 face amount, to 100 1/2.

Manufacturing, Spending Probably Gained in February: U.S. Economy Preview (Source: Bloomberg)
Manufacturing probably accelerated for a fourth straight month in February, consumer confidence improved and Americans picked up the pace of spending a month earlier, economists said reports this week will show. The Institute for Supply Management’s factory index rose to an eight-month high of 54.5 from 54.1 in January, according to the median estimate of 62 economists surveyed by Bloomberg News. Readings above 50 signal growth. Consumer purchases in January rose 0.4 percent, the most in four months, another report may show. Manufacturers remain at the forefront of the more than two- year-old expansion, aided by corporate investment in equipment, inventory rebuilding and a pickup in the auto industry. Risks to the industry that accounts for about 12 percent of the economy include higher fuel costs and a slowdown in Europe linked to its debt crisis.

China’s Congress Make U.S. Peers Look Poor (Source: Bloomberg)
The richest 70 members of China’s legislature added more to their wealth last year than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet, and the nine Supreme Court justices. The net worth of the 70 richest delegates in China’s National People’s Congress, which opens its annual session on March 5, rose to 565.8 billion yuan ($89.8 billion) in 2011, a gain of $11.5 billion from 2010, according to figures from the Hurun Report, which tracks the country’s wealthy. That compares to the $7.5 billion net worth of all 660 top officials in the three branches of the U.S. government. The income gain by NPC members reflects the imbalances in economic growth in China, where per capita annual income in 2010 was $2,425, less than in Belarus and a fraction of the $37,527 in the U.S. The disparity points to the challenges that China’s new generation of leaders, to be named this year, faces in countering a rise in social unrest fueled by illegal land grabs and corruption.

Yen Shows BOJ Stimulus Beating Intervention (Source: Bloomberg)
Bank of Japan Governor Masaaki Shirakawa’s inflation goal is succeeding where record intervention failed, as the yen heads for its steepest monthly drop in two years. The currency plunged to a seven-month low after the BOJ, which has struggled for more than a decade against deflation, said on Feb. 14 it aimed for 1 percent annual gains in consumer prices and would add 10 trillion yen ($123 billion) to the economy. Traders are paying record premiums for options to buy the dollar against the yen for three, six and 12 months. Bullish bets on Japan’s currency have fallen 70 percent from Jan 31. Shirakawa needs a weaker yen to help Japan export its way out of a recession made deeper by last year’s earthquake and the worst nuclear crisis in a generation. Oil and gas imports to replace lost capacity have reversed trade surpluses that made the currency a refuge in a slowing global economy. Prospects of higher inflation are driving it down, at least for now.

South Korea’s Bahk Says Oil Price Surge May Push Inflation Above Target (Source: Bloomberg)
South Korean inflation may accelerate above the government’s target on higher oil prices, just as the nation’s economic growth is about to start improving, Finance Minister Bahk Jae Wan said. While inflation is “likely” to dip this month below the 3.4 percent rate in January and be “even lower” in March, instability in the oil market threatens to push overall consumer prices above the government’s 3.2 percent target for the year, Bahk said in an interview in Mexico City over the weekend. He said that a 10 percent increase in the cost of crude pushes inflation up by 0.12 percentage point. Oil capped its longest rally since January 2010 last week as escalating tension with Iran threatens supplies, with a barrel for April delivery reaching $109.77 on the New York Mercantile Exchange. South Korea’s economy, Asia’s fourth- largest, grew the least in two years last quarter as a faltering global expansion and Europe’s debt crisis hurt exports.

European Leaders Focus on Boosting $672 Billion Firewall After G-20 Rebuff (Source: Bloomberg)
European leaders will shift their focus this week from a Greek bailout to the prospect of bolstering the region’s firewall against debt-crisis contagion as they ready for their latest summit. After lawmakers in Germany and Finland vote on approving the second Greek rescue package today and Feb. 29, European Union heads of government will turn to their March 1-2 summit in Brussels. Leaders of the 17-member monetary union have said they’ll decide in March whether to lift a 500 billion-euro ($672 billion) limit to bailout funding. As the European Central Bank prepares a second round of cash lending to help shore up the region’s banks, policy makers are focused on preventing a Greek collapse in order to take advantage of signs of an improved global economy.
The latest Greek bailout “gives the opportunity of euro- zone leaders to put a better, more organized and larger firewall in place,” William Rhodes, chief executive officer of William R. Rhodes Global Advisors and a former Citigroup Inc. executive, said in a Feb. 24 Bloomberg Radio interview.

U.K. Hometrack Home Prices Underpinned by Rush to Beat Tax-Holiday Expiry (Source: Bloomberg)
U.K. house prices held their value for a second month in February, boosted by a seasonal increase in demand and a rush to beat the expiration of a property-tax exemption, Hometrack Ltd. said. The average cost of a home in England and Wales was unchanged from January and 1.4 percent lower than a year earlier, the London-based property research company said in a report today. The number of potential buyers registering with estate agents rose 18 percent over the month, the largest gain for five years. The figures partly reflect people looking to take advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home for less than 250,000 pounds ($396,000) before it ends next month. Hometrack said the supply-demand balance suggests property prices will resume their decline in the coming months as banks restrict lending and Britons are squeezed by government budget cuts and rising unemployment.

No Silver Bullet to Resolve Europe Debt Crisis, World Bank’s Zoellick Says (Source: Bloomberg)
World Bank President Robert Zoellick said there is no “silver bullet” to resolve Europe’s sovereign-debt crisis and every country has a common interest in seeing the region succeed as they debate chipping in more cash to bailout funds. “The real big issue going forward here will be the success of Spain and Italy,” he said in a Bloomberg television interview in Singapore yesterday. “The good news is we’ve got some very reformist governments in both countries. They are not only undertaking fiscal discipline but they have started undertaking structural reforms.” Officials from the Group of 20 and central bank governors are meeting this weekend in Mexico City, where U.S., Chinese and Japanese officials say they will press euro-area countries to do more to merit outside help to end the region’s sovereign debt crisis. The International Monetary Fund has warned concerns about debt sustainability could drag the world into another recession.
The focus on Spain and Italy comes after euro-area governments sanctioned a 130 billion euro ($174.8 billion) aid package for Greece to avert a March bankruptcy. While China, Japan, Brazil and Mexico said they are willing to help, Europe “must make more efforts to create a bigger firewall,” according to Japan’s Finance Minister Jun Azumi.

20120229 1033 Global Market Related News.

Asia Stocks Swing Between Gains, Losses (Source: Bloomberg)
Asian stocks swung between gains and losses after oil’s longest rally in two years raised concern higher energy costs will weigh on economic growth and as the yen’s decline boosted the outlook for Japanese exporters. Korean Air Lines Co., the nation’s biggest carrier by market value, sank 3.2 percent in Seoul. Newcrest Mining Ltd. (NCM), dropped 3 percent in Sydney after JPMorgan Chase & Co. cut its rating on the Australia’s largest gold explorer. Sony Corp. (6758) gained 3.3 percent as the yen fell to a nine-month low against the dollar. The MSCI Asia Pacific Index (MXAP) rose less than 0.1 percent to 127.99 as of 10:49 a.m. in Tokyo after falling as much as 0.5 percent. The index advanced for a 10th week last week, its longest run of gains since data started being collected in 1988. Shares rose amid confidence China will ease monetary policy and signs the U.S. economy is improving.
Japan’s Nikkei 225 Stock Average (NKY) rose 0.5 percent after the yen touched 81.67 per dollar today, the lowest level since May 31. A weaker yen boosts exporters’ overseas earnings when repatriated. Australia’s S&P/ASX 200 Index slid 0.7 percent. Australian Prime Minister Julia Gillard defeated former leader Kevin Rudd in a leadership ballot, leaving her to unite the ruling Labor party and revive poll ratings before elections due in 2013.

Japan Stocks Advance as U.S. Economic Data Raises Confidence in Recovery (Source: Bloomberg)
Feb. 24 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average advancing for a third week, after U.S. jobs and housing data beat estimates, boosting confidence in the global economic recovery. Sony Corp. (6758), Japan’s leading exporter of consumer electronics, rose 3 percent. Inpex Corp. (1605), the nation’s biggest energy explorer, led stocks in the sector higher after crude prices advanced for a seventh day. Yaskawa Electric Corp. (6506) slipped after a report that AIJ Investment Co., a company that manages some of its money, could not account for 200 billion yen ($2.5 billion) in client funds. The benchmark Nikkei 225 gained 0.5 percent to 9,647.38 as of the 3 p.m. trading close in Tokyo, rising 2.8 percent this week. The broader Topix Index climbed 0.6 to 834.29, its highest close since Aug. 2.
“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 economic fundamentals will create a catalyst that’s been lacking despite attractive valuations.”

S&P 500 Advances to Highest Level Since June 2008 After Economic Reports (Source: Bloomberg)
U.S. stocks rose this week, driving the Standard & Poor’s 500 Index to the highest level since 2008, after Greece got a bailout and better-than-expected data boosted confidence in the world’s largest economy. Energy companies surged 1.9 percent, the most among 10 S&P 500 (SPXL1) industries, as crude oil futures exceeded $109 a barrel. Sears Holdings Corp. (SHLD) rallied 25 percent, the most in the S&P 500, after announcing real estate sales and a rights offering. Technology companies in the stock index advanced an eighth straight week even as Hewlett-Packard Co. (HPQ) tumbled 10 percent. Procter & Gamble Co. added 2.8 percent after saying it will cut 5,700 jobs. The S&P 500 added 0.3 percent to 1,365.74, the seventh gain in the past eight weeks. It exceeded last year’s high of 1,363.61 as a 24 percent rally since October restored $3.2 trillion to American equity values. The Dow Jones Industrial Average (INDU) climbed 33.08 points, or 0.3 percent, to 12,982.95.
The measure exceeded 13,000 for the first time since 2008. “You’re seeing a whiz of optimism mainly because of a lack of negative news out of Europe and moderate growth in the U.S.,” Matt McCormick, who helps oversee about $5.1 billion at Bahl & Gaynor Inc. in Cincinnati, said in a phone interview. “This trend will continue until either of these two variables change.”

European Stocks Post Loss on Greece Austerity Measures, Euro-Area Growth (Source: Bloomberg)
European stocks fell this week on investor concern about Greece’s ability to implement austerity measures needed for a second rescue package, and as the European Commission said the euro area’s economy will shrink this year. National Bank of Greece SA paced declines in banks, sliding 18 percent. Commerzbank AG, the second-biggest German lender, dropped more than 6.6 percent after asking investors to swap hybrid capital instruments for new shares. TNT Express NV, the Dutch express-delivery service, rose 48 percent after rejecting a takeover offer from United Parcel Service Inc. The Stoxx 600 (SXXP) slipped 0.4 percent to 264.77 this week after reaching 268.16 on Feb. 20, the gauge’s highest level since July 26. The benchmark measure has rallied 23 percent from its low on Sept. 22 and 8.3 percent this year as investors speculated euro- area policy makers will contain the sovereign-debt crisis.
“Investors have been hesitant as European politicians face parliamentary votes to pass the bailout for Greece which also faces another general election in April,” said Hans Peterson, the Global Head of Investment Strategy at SEB Private Banking in Stockholm. “Markets are in a waiting position.”

Frontier Stocks Lose in Best Rally Since ‘91 (Source: Bloomberg)
The best start to a year for stocks in two decades is leaving the smallest markets behind, a sign of reduced investor confidence in the least-developed economies. All nine of the world’s worst-performing equity indexes this year are in frontier countries, where the average stock- market value of $30 billion is about 95 percent less than in emerging nations. While the MSCI All-Country World Index (MXWD) jumped 11 percent, gauges in Bangladesh (DHAKA) and Sri Lanka (CSEALL) sank at least 8 percent as interest rates increased. Nigeria’s stock index fell 1.1 percent after union strikes and attacks by Islamic militants. Frontier-nation stocks trade at the lowest valuations since at least 2008 versus emerging-market shares. Falling valuations reflect concern that growth in the smallest economies, which expanded about 20 percent slower than larger developing nations on average during the past three years, won’t accelerate in 2012.
Bank Julius Baer & Co. says the losses create buying opportunities for long-term inves tors. Ashmore EMM LLC has been cutting frontier-market holdings and Oversea-Chinese Banking Corp. (OCBC) is avoiding the stocks.

Consumer Sentiment in U.S. Reaches One-Year High on Jobs Outlook: Economy (Source: Bloomberg)
Confidence among U.S. consumers rose more than forecast in February, reaching a one-year high as Americans grew more upbeat about the outlook for the economy. The Thomson Reuters/University of Michigan final index of consumer sentiment increased to 75.3 this month from 75 in January. The median estimate in a Bloomberg News survey called for 73, after a preliminary reading of 72.5. New-home sales last month were stronger than projected, another report showed. Three straight months of faster job growth along with a stock market rally since late 2011 are helping keep Americans optimistic in the face of rising gasoline prices. Further gains in confidence may sustain the household spending that accounts for about 70 percent of the economy.
“The overwhelming fact is that the job market has gotten better,” said Bill Cheney, chief economist for John Hancock Financial Services Inc. in Boston, who projected a gain. “People are back to spending most of the additional income that they get, so as employment increases and you get some meager increases in wages, they do feed through to more spending.”

Treasury Gain Slows on Speculation Report to Show Pending Home Sales Rose (Source: Bloomberg)
Gains in 10-year Treasuries slowed before an industry report forecast to show pending home sales rebounded in January after sliding in December. U.S. government securities have fallen 0.8 percent in February as the economy shows signs of improvement, heading for their first monthly loss since October, based on Bank of America Merrill Lynch data. Pending home sales rose 1 percent, recovering from December’s 3.5 percent slide, according to the median forecast in a Bloomberg News survey of economists before the National Association of Realtors reports the figure today. Ten-year yields were little changed at 1.97 percent as of 10:31 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security maturing in February 2022 changed hands at 100 1/4. The rate declined three basis points, or 0.03 percentage point, last week.
“Housing is bottoming out and starting to recover,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “Yields around 2 percent are too low given inflation pressure and the economic recovery.” Manufacturing probably accelerated for a fourth month in February, consumer confidence improved and Americans picked up the pace of spending in January, economists forecast separate reports this week will show.

U.S. Treasuries Halt Three-Week Downturn on European Debt Crisis Concerns (Source: Bloomberg)
Treasuries rose, with 30-year bonds halting a three-week slide, amid concern Europe’s rescue package for Greece won’t fully resolve the region’s sovereign-debt crisis. U.S. 10-year yields reached the lowest in a week yesterday as Fitch Ratings lowered Greece’s credit rating and said a default is highly likely, fueling refuge demand. The U.S. sold $99 billion in notes while the Federal Reserve bought $3.8 billion in longer-term Treasuries. The difference between the yields on 10-year notes and inflation-indexed securities was close to the highest since August before a report that is forecast to show U.S. manufacturing output expanded in February.
“We started the week with optimism that an agreement was in place in Greece that would take some pressure off that European crisis, but any selloff was met with buyers as it turns out nothing has really changed,” said Larry Milstein, managing director in New York of government trading at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “There is still a lot of uncertainty, and the Fed is still buying, which is giving support to Treasuries.” Yields on 30-year bonds fell five basis points, or 0.05 percentage point, this week to 3.10 percent, according to Bloomberg Bond Trader prices. The 3.125 percent securities maturing in February 2042 increased 30/32, or $9.38 per $1,000 face amount, to 100 1/2.

Manufacturing, Spending Probably Gained in February: U.S. Economy Preview (Source: Bloomberg)
Manufacturing probably accelerated for a fourth straight month in February, consumer confidence improved and Americans picked up the pace of spending a month earlier, economists said reports this week will show. The Institute for Supply Management’s factory index rose to an eight-month high of 54.5 from 54.1 in January, according to the median estimate of 62 economists surveyed by Bloomberg News. Readings above 50 signal growth. Consumer purchases in January rose 0.4 percent, the most in four months, another report may show. Manufacturers remain at the forefront of the more than two- year-old expansion, aided by corporate investment in equipment, inventory rebuilding and a pickup in the auto industry. Risks to the industry that accounts for about 12 percent of the economy include higher fuel costs and a slowdown in Europe linked to its debt crisis.

China’s Congress Make U.S. Peers Look Poor (Source: Bloomberg)
The richest 70 members of China’s legislature added more to their wealth last year than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet, and the nine Supreme Court justices. The net worth of the 70 richest delegates in China’s National People’s Congress, which opens its annual session on March 5, rose to 565.8 billion yuan ($89.8 billion) in 2011, a gain of $11.5 billion from 2010, according to figures from the Hurun Report, which tracks the country’s wealthy. That compares to the $7.5 billion net worth of all 660 top officials in the three branches of the U.S. government. The income gain by NPC members reflects the imbalances in economic growth in China, where per capita annual income in 2010 was $2,425, less than in Belarus and a fraction of the $37,527 in the U.S. The disparity points to the challenges that China’s new generation of leaders, to be named this year, faces in countering a rise in social unrest fueled by illegal land grabs and corruption.

Yen Shows BOJ Stimulus Beating Intervention (Source: Bloomberg)
Bank of Japan Governor Masaaki Shirakawa’s inflation goal is succeeding where record intervention failed, as the yen heads for its steepest monthly drop in two years. The currency plunged to a seven-month low after the BOJ, which has struggled for more than a decade against deflation, said on Feb. 14 it aimed for 1 percent annual gains in consumer prices and would add 10 trillion yen ($123 billion) to the economy. Traders are paying record premiums for options to buy the dollar against the yen for three, six and 12 months. Bullish bets on Japan’s currency have fallen 70 percent from Jan 31. Shirakawa needs a weaker yen to help Japan export its way out of a recession made deeper by last year’s earthquake and the worst nuclear crisis in a generation. Oil and gas imports to replace lost capacity have reversed trade surpluses that made the currency a refuge in a slowing global economy. Prospects of higher inflation are driving it down, at least for now.

South Korea’s Bahk Says Oil Price Surge May Push Inflation Above Target (Source: Bloomberg)
South Korean inflation may accelerate above the government’s target on higher oil prices, just as the nation’s economic growth is about to start improving, Finance Minister Bahk Jae Wan said. While inflation is “likely” to dip this month below the 3.4 percent rate in January and be “even lower” in March, instability in the oil market threatens to push overall consumer prices above the government’s 3.2 percent target for the year, Bahk said in an interview in Mexico City over the weekend. He said that a 10 percent increase in the cost of crude pushes inflation up by 0.12 percentage point. Oil capped its longest rally since January 2010 last week as escalating tension with Iran threatens supplies, with a barrel for April delivery reaching $109.77 on the New York Mercantile Exchange. South Korea’s economy, Asia’s fourth- largest, grew the least in two years last quarter as a faltering global expansion and Europe’s debt crisis hurt exports.

European Leaders Focus on Boosting $672 Billion Firewall After G-20 Rebuff (Source: Bloomberg)
European leaders will shift their focus this week from a Greek bailout to the prospect of bolstering the region’s firewall against debt-crisis contagion as they ready for their latest summit. After lawmakers in Germany and Finland vote on approving the second Greek rescue package today and Feb. 29, European Union heads of government will turn to their March 1-2 summit in Brussels. Leaders of the 17-member monetary union have said they’ll decide in March whether to lift a 500 billion-euro ($672 billion) limit to bailout funding. As the European Central Bank prepares a second round of cash lending to help shore up the region’s banks, policy makers are focused on preventing a Greek collapse in order to take advantage of signs of an improved global economy.
The latest Greek bailout “gives the opportunity of euro- zone leaders to put a better, more organized and larger firewall in place,” William Rhodes, chief executive officer of William R. Rhodes Global Advisors and a former Citigroup Inc. executive, said in a Feb. 24 Bloomberg Radio interview.

U.K. Hometrack Home Prices Underpinned by Rush to Beat Tax-Holiday Expiry (Source: Bloomberg)
U.K. house prices held their value for a second month in February, boosted by a seasonal increase in demand and a rush to beat the expiration of a property-tax exemption, Hometrack Ltd. said. The average cost of a home in England and Wales was unchanged from January and 1.4 percent lower than a year earlier, the London-based property research company said in a report today. The number of potential buyers registering with estate agents rose 18 percent over the month, the largest gain for five years. The figures partly reflect people looking to take advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home for less than 250,000 pounds ($396,000) before it ends next month. Hometrack said the supply-demand balance suggests property prices will resume their decline in the coming months as banks restrict lending and Britons are squeezed by government budget cuts and rising unemployment.

No Silver Bullet to Resolve Europe Debt Crisis, World Bank’s Zoellick Says (Source: Bloomberg)
World Bank President Robert Zoellick said there is no “silver bullet” to resolve Europe’s sovereign-debt crisis and every country has a common interest in seeing the region succeed as they debate chipping in more cash to bailout funds. “The real big issue going forward here will be the success of Spain and Italy,” he said in a Bloomberg television interview in Singapore yesterday. “The good news is we’ve got some very reformist governments in both countries. They are not only undertaking fiscal discipline but they have started undertaking structural reforms.” Officials from the Group of 20 and central bank governors are meeting this weekend in Mexico City, where U.S., Chinese and Japanese officials say they will press euro-area countries to do more to merit outside help to end the region’s sovereign debt crisis. The International Monetary Fund has warned concerns about debt sustainability could drag the world into another recession.
The focus on Spain and Italy comes after euro-area governments sanctioned a 130 billion euro ($174.8 billion) aid package for Greece to avert a March bankruptcy. While China, Japan, Brazil and Mexico said they are willing to help, Europe “must make more efforts to create a bigger firewall,” according to Japan’s Finance Minister Jun Azumi.

20120227 1032 Global Commodities Related News.

Commodities Record Longest Rally in 10 Months After Gains in U.S. Economy (Source: Bloomberg)
Commodities rose, capping the longest rally in 10 months, on signs of gains in the U.S. economy. Industrial metals and crude oil led the rally. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 1.1 percent to settle at 715.52 at 3:45 p.m. New York time. The gauge climbed for the seventh straight session, the longest rally since April. Earlier, the measure reached 715.77, the highest since May 5. An index of U.S. consumer confidence unexpectedly rose to a one-year high in February, and purchases of new homes in January topped forecasts by analysts, according to reports today. Jobless claims held at a four-year low, data showed yesterday. China may make more cuts to banks’ reserve requirements to fuel lending and sustain economic growth.
“The environment is ideal for commodities,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “On one hand, the U.S. is growing, and on the other, China is making credit availability easier. People also expect the situation in Europe to improve.” In the week ended Feb. 21, hedge funds and other money managers increased net-long positions, or bets on a rally, in 18 U.S. commodity futures and options to the highest since September, government data showed today. The dollar fell to an 11-week low against a basket of major currencies.

Bullish Futures Top 1 Million Contracts For First Time in ’12: Commodities (Source: Bloomberg)
Bullish commodities futures rose above 1 million contracts for the first time in five months as U.S. growth prospects improved and Goldman Sachs Group Inc. predicted further price gains. Hedge funds and money managers boosted combined net-long positions across 18 U.S. futures and options by 7.3 percent to 1.03 million contracts in the week ended Feb. 21, Commodity Futures Trading Commission data show. That’s the highest since Sept. 13. Bullish wagers on gold climbed to a five-month high, and bets on crude oil rose to the most since May. The Standard & Poor’s GSCI Spot Index of 24 commodities capped its biggest weekly increase of the year last week, touching a nine-month high on Feb. 24. U.S. consumer confidence rose more than forecast in February, and new-home sales topped estimates. Goldman reiterated an “overweight” recommendation on raw materials on Feb. 22.
“The U.S. is showing better signs of self-sustaining economic activity,” said Michael Strauss, who helps oversee about $27 billion of assets as chief investment strategist at Commonfund in Wilton, Connecticut. “What we see is reasonable global growth this year, which should be supportive of gains in overall commodities.”

Corn (Source: CME)
US corn futures end mixed, with nearby contracts gaining slightly on tight near-term supplies while deferred months slide on the prospect of a large crop this year. ABN Amro says talk of export interest from Asia, including China, helped lift the market off early losses. But the USDA's projections for increased acreage and a much-better yield this year are negative for new-crop prices. Traders add that March options expiration played a role in Friday's sideways trade. CBOT March corn ends up 1 1/4c at $6.40 3/4 per bushel while December falls 3/4c to $5.58.

Wheat (Source: CME)
US wheat futures end mostly lower on large world supplies and prospect of increased domestic supplies. MGEX led the slump, falling to a fresh 15-month low on USDA's forecast for increased spring wheat acreage and snow in the Northern Plains that alleviates drought concerns there. Meanwhile world supplies are abundant, and export demand, though solid in the USDA's weekly report, is generally considered lackluster. Market trimmed early losses as corn prices rebounded. CBOT March wheat ends down 3/4c to $6.41/bushel, while MGEX March wheat falls 14 1/2c to $7.85 1/2. KCBT March wheat ends up 1c to $6.81.

Rice (Source: CME)
US rice futures end higher, climbing amid acreage concerns. CBOT March rice ends up 24c at $14.20 1/2 per hundredweight, but the market remains range-bound. Upside is limited by poor export demand, but concerns about how much rice US farmers are planting underpins prices. Rice finished just above the 50-day moving average.

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.
Soybeans slid from a five-month top, while corn dipped in sympathy with the weakness in wheat.  
"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.

China's demand for US corn seen rising after latest buy
Feb 23 (Reuters) - China's first major purchase of U.S. corn in four months may be a harbinger of more deals as surging prices in that country's southern region make imports from the United States a cost-effective move, analysts and traders said.
The U.S. Department of Agriculture on Thursday said China bought of 120,000 tonnes of U.S. corn. The grain will be from last year's harvest, supplies of which already are rapidly shrinking and forecast to reach a 16-year low before the next harvest this fall.

Bunge to boost investments in Brazil agriculture
SAO PAULO, Feb 23 (Reuters) - International foods processor Bunge Ltd  plans to invest an additional 1 billion reais ($584 million) in Brazil with a possible focus on palm oil production, the company's chief executive of agribusiness in Brazil, Pedro Parente, said on Thursday.
The investment is in addition to the $2.5 billion in investments through 2016 in sugar, ethanol and biomass energy generation that the company announced in August.

Drought improves in Texas, worsens in western U.S.
Feb 23(Reuters) - Drought kept a tight grip on large sections of the United States, but recent rains put some of the most hard-hit areas on the road to recovery, a report from climate experts said Thursday.
Recent rains and snowfall boosted soil moisture and started to replenish ground water supplies in key areas of the U.S. South that suffered historic drought in 2011.

EU clears 299,000 tonnes wheat exports this week
PARIS, Feb 23 (Reuters) - The European Union this week granted export licences for 299,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 8.7 million tonnes, official data showed on Thursday.
The total so far this season compared with 13.1 million tonnes of export licences cleared by the same stage in 2010/11.

Iran pumps up grain buys with further 800,000 T
HAMBURG, Feb 23 (Reuters) - Iran ramped up grain purchases on international markets this week, taking the total bought this month to almost two million tonnes as the Islamic republic scrambled to sidestep western sanctions aimed at thwarting its nuclear ambitions.
Government Trading Corporation of Iran (GTC), breaking with the previous practice of private-sector wheat purchases, bought some 800,000 tonnes of wheat, trade sources told Reuters on Thursday, including 500,000 tonnes from Russia and 300,000 tonnes from Australia.  

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.

USDA Sees Record 2012-13 US Corn Output, Prices Down (Source: CME)
The U.S. is likely to produce a record 14.27 billion bushels of corn and 3.25 billion bushels of soybeans in the 2012-13 marketing year, with the large crop pushing down prices for corn, soybeans and wheat, the U.S. Department of Agriculture said. The output projections were above the USDA's baseline forecasts issued this month, which projected corn output of 14.235 billion bushels and soybean output of 3.215 billion bushels in the year from September 2012 to August 2013. Those projections were compiled in November as part of the government's budget process. In the 2011-12 marketing year, corn output was 12.358 billion bushels and soybean production was 3.056 billion bushels. Farmers are likely to plant so much corn this year--about 94 million acres, the most since 1944--that production will sharply overshoot demand, pushing up stocks and pulling down prices, the USDA said. Recent high corn prices have also made farmers more likely than usual to plant that crop instead of soy in the next year, analysts say.
Corn ending stocks are likely to double to 1.616 billion bushels from 801 million bushels at the end of the 2011-12 marketing year, "pushing cash prices sharply lower by fall harvest," the USDA said. "Futures and cash prices for wheat, corn, and soybeans are all expected to fall in 2012-13 as record U.S. corn production pushes global grain supplies to a new record," the USDA said. "Despite the expected decline, prices remain historically high because of strong global demand for grains and oilseeds." But demand from ethanol producers is falling and that sector won't be buying as much corn. "Falling gasoline consumption and declining ethanol exports limit expected corn use in the production of ethanol," USDA said. The USDA also forecast wheat production of 2.165 billion bushels, up slightly from a baseline projection of 2.12 billion bushels, and up from 2.0 billion bushels in 2011-12.
Strong crop prices are driving farmers' intentions to plant more this year, the USDA said. "Combined 2012 area for wheat, corn and soybeans is projected to be [a] record high and up 3% from 2011 supported by strong new-crop futures prices and a return to more normal spring and summer weather," it said. The USDA forecast cotton production of 17 million bales, up from a baseline projection of 16.2 million bales. The USDA forecasts are subject to change in coming months as they come long before the harvest and the current figures are not based on surveys of farmers.

US Spring Wheat Futures Fall To 15-Month Low On Acreage, Weather (Source: CME)
U.S. hard red spring wheat futures fell to their lowest level in 15 months Fas prospects for the crop start to look much better than they did a year ago. Hard red spring wheat, a high-protein wheat used for baking bread, is traded at the Minneapolis Grain Exchange, or MGEX. In recent months, it has traded at an abnormally high premium to other types of wheat traded in Chicago and Kansas City. But that gap could shrink in the months ahead. Prices for hard red spring wheat fell to their lowest level since Dec. 1, 2010 Thursday. MGEX futures for March delivery recently were down 14.75 cents to $7.8625 per bushel, down 18% since early November. The slump started to accelerate Thursday after the U.S. Department of Agriculture's chief economist said at an annual-outlook conference spring wheat acreage would jump this year as many farmers in the northern U.S. Plains, unable to plant because of wet weather in 2011, reclaim flooded fields.
Meanwhile, a late-February shift in weather patterns is giving soils much-needed moisture, alleviating concerns a drought could stifle crops this spring. Much of the Dakotas received several inches of wet snow Thursday and more snow is likely next week, Tregg Cronin, an analyst with Country Hedging, a brokerage near St. Paul, Minn., said. "This is speculative selling tied to the outlook numbers and the weather forecast," Cronin said of the market selloff. The market traded above $8 for virtually all of 2011, and Friday's decisive move below that support level prompted more selling, traders said. The decline also is partly seasonal, they added. "You're entering a period of the year where if things go right [for crops], it's natural to see some pressure," Jim Gerlach, president of A/C Trading, a Fowler, Ind. brokerage, said.
The weakness in spring wheat comes at a time of more modest losses for soft red winter wheat at the Chicago Board of Trade and hard red winter wheat at the Kansas City Board of Trade. Still, the entire market is being pressured by bulging world stockpiles and U.S. crop prospects. The USDA projects total U.S. wheat acres this year will jump 6.6% to 58 million. CBOT wheat was down 4.25 cents to $6.375 per bushel, while KCBT wheat was down five cents to $6.75. Because of its higher protein content, MGEX wheat prices are usually higher than those for winter wheats. But the spread between MGEX prices and those in Chicago and Kansas City is more than double the historical average, thanks to last year's flood that limited the size of the spring wheat crop, as well as crop troubles for other types of wheat that prompted food companies to seek out more high-protein wheat to blend in their products, analysts said.
If weather in the northern Plains remains favorable, "spring wheat can fall for a while, and we don't need to see the other two markets do much of anything," Cronin said.

Global Rice Inventories To Rise For Seventh Successive Year -IGC (Source: CME)
Global rice inventories will likely to rise for a seventh consecutive year to a nine-year high of 99.3 million tons in 2011-12, up 4% compared with the previous year, as major exporting countries, especially Thailand, are maintaining larger inventories, the International Grains Council said. The IGC tabulates its data over an aggregate marketing year covering all major producing and trading countries. It revised upward its forecast for Thailand's rice stocks at the end of 2012 by 4% to 7.7 million tons, up 43% on year. Thailand's exports have been falling sharply in recent months, after the government started purchasing unmilled rice from farmers at prices that are higher than most export prices from competing countries. The IGC lowered its 2012 rice export forecast for Thailand by 7% to 6.7 million tons; down 37% on year. Traders said that current trends indicate exports may fall even more steeply, to 6.0 million tons or lower.
India's rice stocks will likely total 21 million tons by end-September, up 5.5% on year, the IGC said. Record global rice output of 463 million tons, up 3% on year, is helping to push prices higher, the IGC said. "Exceptional production in India and China will more than offset the fall in Brazilian and U.S. output," it said, putting China's rice output in 2012 at 140.5 million tons, up 2.5% on year. India's government has forecast rice output in 2011-12 at a record 102.8 million tons, a 7% increase from last year. Inventories are more than comfortable, as the government had a stockpile of 31.8 million tons rice at the beginning of this month--more than double the country's mandatory minimum buffer requirement and almost equal to the total global annual trade in rice. The global rice trade in 2012 will decline by 7% to 32.2 million tons due to reduced demand in Bangladesh and Indonesia, the IGC said. Imports in the East and South Asian regions will decline by one-fifth to 8.4 million tons, it said.
After last year's heavy purchases, Indonesia's imports may fall to 900,000 tons from 2.6 million tons, while Bangladesh's imports will likely fall by 50% to 700,000 tons, it said. The IGC revised upward its forecast for India's exports in 2012 by 22% to 6.1 million tons; up 50% from last year. India, which resumed non-Basmati rice exports in September, had already shipped out 2.7 million tons of these grades by end-January, the IGC said. India's rice exports are underpinned by strong demand from buyers in Africa, it added.

India govt issues sugar export notification-source
LONDON, Feb 23 (Reuters) - India's government on Thursday issued a notification to mills detailing terms for the export of 1 million tonnes of unrestricted sugar during the 2011/12 season, a trade source told Reuters.
A copy of the letter dated Feb. 23 from Rajan Sehgal, chief director sugar, to Indian mills was made available to Reuters, detailing terms for the export of the so-called Open General License (OGL) sugar.

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.

GEPEX exporters end Ivorian cocoa auction boycott -sources
ABIDJAN, Feb 23 (Reuters) - The GEPEX group of exporters that accounts for about 55 percent of Ivory Coast's cocoa exports has agreed to end its boycott of auctions, three industry sources told Reuters on Thursday.
The group, which includes Nestle , Cargill Barry Callebaut , Olam  and ADM  Cocoa, will take part in auctions starting from Friday, the sources told Reuters, asking not to be named.

Oil Drops From Nine-Month High After IMF Warns on Global Economic Growth (Source: Bloomberg)
Oil fell from the highest level in more than nine months as investors bet that prices have climbed too far after the International Monetary Fund warned that the global economy is still at risk of a slowdown. Futures slid as much as 0.4 percent in New York. Oil’s relative strength index signaled crude’s seven days of gains, the longest winning streak since January 2010, may have been exaggerated. The world economy is “not out of the danger zone” amid fragile financial systems, high debt and higher world oil prices, IMF Managing Director Christine Lagarde said. Prices rose the most in two months last week as sanctions tightened against Iran, OPEC’s second-biggest producer. “The market is taking a bit of profit,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “There’s still a lot of uncertainty. The market is still concerned about what will happen with Iran.”
Oil for April delivery fell as much as 47 cents to $109.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $109.56 at 12:47 p.m. Sydney time. The contract gained 1.8 percent to $109.77 on Feb. 24, the highest close since May 3. Prices increased 6.3 percent last week and are 13 percent higher the past year.

Oil rally runs into first signs of Asian resistance
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, Feb 23 (Reuters) - Asian crude oil buyers are starting to balk at increasingly costly Brent crude oil. The sustainability of the current rally hinges on Asia recovering its for Atlantic basin crude.
The Brent-Dubai exchange of futures for swaps (EFS) quote , the premium holders of Asian benchmark Dubai swaps must pay over their postion to switch into Brent, is signalling a growing weariness with the recent spike in Brent prices.

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 growth.
"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.

China Jan crude runs pull back from record highs
BEIJING, Feb 24 (Reuters) - Chinese refineries processed 36.2 million tonnes of crude oil in January, or 8.52 million barrels per day (bpd), 1.9 percent more than a year earlier, the National Development and Reform Commission said on Friday.
The daily throughput was about 8 percent less than in December when refiners in the world's second-largest consuming market processed a record 9.24 million bpd of crude oil after running at the second-highest rate of 9.22 million bpd in November.

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.

China May Double Rare Earth Exports This Year as Demand Rebounds on Price (Source: Bloomberg)
China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand. Chinese exports were 49 percent of the goverment-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said in a Dec. 27 statement. Overseas sales quotas may be virtually unchanged this year at 31,130 metric tons, based on Bloomberg calculations. “Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. “High prices last year had deterred purchases and led to inventories depletion. Smuggling also hampered exports through illegal channels.”
Prices of rare earths have tumbled since the third quarter as consumers including makers of electric cars and wind turbines sought to reduce use. The average price of lanthanum oxide, a rare earth used in rechargeable batteries and refining catalysts, was 129,167 yuan ($20,508) a metric ton in the fourth quarter, 15 percent less than in the third quarter, according to data from Shanghai Steelhome Information.

Iron Ore-Spot extends gains as traders bet on China demand
SINGAPORE, Feb 24 (Reuters) - Spot prices of imported iron ore in China rose on Friday as traders bid up the market, betting on a recovery in domestic steel demand when construction projects resume next month.
Global miner BHP Billiton   sold several cargoes this week at prices around $3 more than previous deals, traders said, adding the bulk of the buyers could be traders positioning ahead of an expected rebound in China's steel prices.  

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.

The BalticBaltic index turns positive, capesizes support
Feb 23 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose on Thursday, snapping a six-day losing streak,  as rates firmed for capesize vessels.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 2 points or 0.28 percent to 706 points.

20120227 1029 Soy Oil & Palm Oil Related News.

ITS CPO export up 1.1% to 992,362 tonnes for the period of 1~25 Feb 2012.
SGS CPO export up 4.5% to 989,868 tonnes for the period of 1~25 Feb 2012.

A Malaysian company expressed interest to establish a palm oil mill in West Sulawesi, says its governor Anwar Adnan Saleh. He added oil palm plantations were expanding into the Polman district. (Malaysian Reserve)

Indonesia kept the tax rate for crude palm oil exports in March at 16.5% and kept the tariff on cocoa bean exports at 5%, Deddy Saleh, director general of foreign trade at the Trade Ministry, said. The base price to calculate the levy for crude palm oil exports was raised to US$1,017 per ton from US$1,001 per ton, Saleh said. (Bloomberg)

Soybeans (Source: CME)

US soybean futures ended higher, continuing a trend of fresh highs for the current move. Strong export demand, forecasts for tightening stocks in the 2012/13 marketing year and the need for soy prices to remain competitive with corn to secure enough 2012 acres to maintain adequate supplies, bolstered buying, analysts say. Traders bought soybeans and sold corn and wheat on spreads, as feed grains are hampered by negative supply and price forecasts from USDA. CBOT March soybeans rallied to a new five-month high during the session, settling up 2 1/4c to $12.79/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures end modestly higher, feeding off the supportive theme in soybean futures. Strong weekly export sales helped buoy both soymeal and soyoil, with soyoil drawing additional support from rallying energy prices, analysts say. Soyoil is key feedstock for biodiesel production, tying its price movements with crude oil, analysts say. CBOT March soyoil ended up 0.09c at 54.29 cents/pound, and March soymeal ended up $0.70 to $333.60/short ton.

Palm Oil To Rise At Least 10% On Tight Vegoil Supply -New Britain Executive (Source: CME)
Rising global demand for vegoil amid weaker palm oil production growth for the year ahead could help send prices up further, a company executive at New Britain Palm Oil Ltd. (NBPO.LN) said. "Any [fresh] supply-side shocks [in South America] can see palm oil prices move up dramatically from current price levels to more than $1,200 a metric ton in the first half of the year," Alan Chaytor, executive director at New Britain, said in a telephone interview from London. Palm oil prices have risen 1.6% so far this year, driven partly by yield-sapping dry weather in major soybean growing areas of South America. Buyers generally use more palm oil if soy and rapeseed oils are unavailable. The benchmark May contract on Bursa Malaysia Derivatives ended 0.1% higher at MYR3,276/ton ($1,088). Argentina's Rosario Grain Exchange said in a report Thursday that Argentine farmers will harvest 44.5 million tons of soyoil in 2012, well below an earlier estimate of 49.5 million tons due to drought damage.
Palm oil output in Indonesia and Malaysia, which account around 90% of global production, are expected to slow down for the year ahead as trees rest after last year's bumper crop harvests. Production growth at New Britain's palm plantations in Papua New Guinea may slow for the year ahead, said Chaytor, after registering a 24% jump to 551,657 tons in 2011. "Production is likely to be flat to around 9% higher for this year," he said. Chaytor also said the firm's plantation acreage may rise 2,000-5,000 hectares a year. New Britain currently owns over 78,000 hectares of planted oil palm estates in Papua New Guinea and Solomon Islands. It is also the largest sugar producer in Papua New Guinea and harvested around 301,000 tons of sugar in 2011.

Palm oil slips on global growth worries, China eyed
SINGAPORE, Feb 24 (Reuters) - Malaysian crude palm oil futures eased in thinly traded markets as investors chose to remain on the sidelines,  wary that rising oil prices could hurt global economic growth and commodity demand.  
Emerging concerns that No.2 edible oil consumer China's demand for the tropical oil could ease on high stock levels may further depress prices that rose more than 6 percent this month alone.
"China's demand for palm oil will slow down as its economy is slowing and the government is trying to maintain a slow growth," said a Singapore-based physical trader with a local trading company in reference to the world's second largest economy.

Indonesia keeps palm export tax at 16.5 pct for March
JAKARTA, Feb 24 (Reuters) - Indonesia, the world's top palm oil producer, will keep its export tax for the edible oil unchanged at 16.5 percent and its tax on cocoa beans at 5 percent for March, a trade ministry official said on Friday.  
The government also kept the export tax for RBD palm olein at 8 percent for March, said Deddy Saleh, the director general of foreign trade at the trade ministry.