Increased risk appetite lifts shares after data, Fed
TOKYO, March 14 (Reuters) - Asian shares rose as upbeat U.S. economic data boosted investors' risk appetite, while reduced expectations for further monetary easing by the Federal Reserve underpinned the dollar.
"The markets do run very much on confidence and at the moment, that's improved greatly. The international markets, in particular Wall Street, have been having a nice rally," said Grant Williamson, a partner at New Zealand brokerage Hamilton Hindin Greene.
FOREX-Dollar stronger across the board, hits 11-mth high vs yen
TOKYO, March 14 (Reuters) - The dollar hit an 11-month high against the yen on Wednesday, building on its broad gains after a modest brightening of the Federal Reserve's economic forecasts nudged traders to downplay expectations of further monetary easing.
U.S. 10-year Treasury yields hovered near a 3-1/2-month high hit after solid retail sales data, making the dollar less attractive as a funding currency for carry trades. Tokyo exporters were also reluctant to sell it now, expecting more strength, traders said.
Fed gives mostly high grades in bank stress tests
March 13 (Reuters) - Most of the largest U.S. banks passed their annual stress test, according to the Federal Reserve, in a conservative report card that underscored the recovery of the financial sector but called out a few laggards, namely Citigroup.
The Fed announced the results in an earlier-than-expected release on Tuesday. JPMorgan Chase pulled the trigger on announcing its own glowing marks before the Fed's release, and helped lift the stock market.
Politics push China's property tax toward Beijing
BEIJING, March 14 (Reuters) - China's capital could be the next major testing ground for a national property tax, putting the central government at risk of vocal criticism close to home that underscores its determination to roll out an unpopular fiscal plan that has been a decade in the making.
Premier Wen Jiabao's opening address last week to the largely rubber-stamp annual meeting of parliament, the National People's Congress (NPC), made it crystal clear that the leadership will push ahead with property tax reform.
German, French fin mins say worst of euro crisis over
PARIS, March 13 (Reuters) - German Finance Minister Wolfgang Schaeuble and his French counterpart Francois Baroin said on Tuesday that the worst of the euro zone crisis appeared to be over, but warned member states that was no excuse to skimp on difficult reforms.
"We can say that the worst is behind us, but we cannot relax our efforts," Schaeuble told a conference in Paris. "I think we can say with a 50 percent probability that the worst is behind us."
U.S. soy rises on drought in South America
SYDNEY, March 14 (Reuters) - Chicago soy futures extended gains, after closing at their highest level in 5-1/2 months in the previous session, on worries over tighter supplies in the wake of a drought in South America.
“Export prospects for U.S. soybeans were improving despite rising prices as many global buyers had expected more South American supplies to be available”, analysts with Oil World said.
Ghana cocoa output to rival record
ACCRA, March 13 (Reuters) - Ghana's cocoa production this season will rival last year's record 1 million-tonne crop due to improved weather and farming techniques, the West African country's cocoa regulator told Reuters on Tuesday.
The rosy outlook from the world's No. 2 grower cuts a stark contrast to other regional producers like neighbouring Ivory Coast, where a stretch of dry, windy weather has cut output and darkened prospects for the rest of the season.
Ukraine AgMin cuts wheat harvest outlook to 14 mln T
KIEV, March 13 (Reuters) - Ukraine's Agriculture Ministry has cut its 2012 wheat harvest forecast to 14 million tonnes from 16 million tonnes, Minister Mykola Prysyazhnyuk said on Tuesday, after winter plantings suffered from drought and frost.
"We expect to reach a harvest of 14 million tonnes of wheat," Prysyazhnyuk said.
Ivorian farmers in dark over cocoa reform
SOUBRE, Ivory Coast, March 13 (Reuters) - Farmers, who are at the centre of Ivory Coast's cocoa reform, say they know little about what it means for them.
The reform, which guarantees minimum prices to farmers in the hope of encouraging re-investment in the cocoa industry, is crucial to Ivory Coast winning International Monetary Fund-backed debt relief. The IMF says it wants to see the system up and running for six months before giving the go-ahead.
India's cotton exports split industry, government
NEW DELHI, March 13 (Reuters) - The Indian government should allow fresh cotton exports when ministers meet on the issue in two weeks to help prop up falling domestic prices -- an indication of comfortable local supplies -- the chief of a leading trade body said on Tuesday.
But New Delhi may resist this call because textile mills are still worried that record exports from India, the world's No. 2 producer, could lead to a domestic supply shortage and are pressuring New Delhi to keep a controversial ban in place.
Brent crude steadies above $126 ahead of US oil data
SINGAPORE, March 14 (Reuters) - Brent crude steadied above $126 as expectations for a build in U.S. crude inventories offset improving economic sentiment in the world's top oil consumer.
"The U.S. economy seems more buoyant, so that is keeping the market up," said Tony Nunan, a risk manager at Mitsubishi Corp.
U.S. asks Saudis to lift oil output from July
KUWAIT, March 13 (Reuters) - The United States is pressing Saudi Arabia to boost oil output to fill a likely supply gap arising from sanctions on Iran, Gulf oil officials said, adding that an increase in production is unlikely to be needed before July.
Saudi Arabia is the only producer with spare capacity and oil importers will rely on Riyadh to fill the gap should Iranian output drop.
China, India 2030 coal imports may hit 1.4 bln tonnes
NEW DELHI, March 14 (Reuters) - China's thermal coal imports could soar to one billion tonnes in 2030 from just 175 million in 2011 , while India's imports will be at least 400 million tonnes in that same year, five times last year's levels, research consultants Wood Mackenzie said.
Imports will rise as surging growth boosts demand for electricity in two of Asia's largest economies, which rely heavily on coal for power generation, Wood Mackenzie's coal market analyst Prakash Sharma told Reuters.
Euro Coal-Prices ease along with gas
LONDON, March 13 (Reuters) - Prompt physical coal prices dropped slightly on Tuesday in line with weaker gas, with few fresh trades seen.
The fundamentals for coal in the Atlantic look weak, traders and utilities said, but the market is being driven more by moves in gas and oil prices than the lack of physical demand, which has trimmed 15 percent from coal prices since October.
India's coal regulator plan gathers pace
NEW DELHI, March 13 (Reuters) - India's draft bill on coal regulator is ready and will be presented to the cabinet soon, Coal Secretary Alok Perti said on Tuesday .
"A coal regulator is important. It will certainly add to improving the situation," said Perti, as the country struggles to produce enough of the cheap fuel for power stations.
Iron Ore-Spot price firms, rebar hits 5-week top
SHANGHAI, March 14 (Reuters) - Iron ore prices gained for a second straight session, rising to its loftiest in five weeks, amid signs steel demand was picking up at key consumer China.
Australian Pilbara fines with 61.5 percent iron content were being offered at $143 to $145 per tonne, including freight, up $1 from the previous day, according to industry consultancy Umetal.
Copper pauses after gains on data, Fed
SINGAPORE, March 14 (Reuters) - Copper prices traded slightly lower, off a one-week high hit in the previous session on upbeat data from the United States and Germany, and the Federal Reserve's acknowledgement of signs of economic recovery.
"Overall the market sentiment remains optimistic -- the situation in euro zone is improving, U.S. stock market is at highest since 2008 -- the external market is quite buoyant and will help support copper," said a Shanghai-based trader.
Rains hit north Chile mines, operations continue
SANTIAGO, March 13 (Reuters) - Heavy rains in Chile's mineral-rich north have cut off roads at No. 3 copper mine Collahuasi and Cerro Colorado but operations have been little affected, worker and company sources said on Tuesday morning.
A river burst its bank near BHP Billiton's Cerro Colorado, impeding plant maintenance and plant operation workers from changing shifts, a union leader said.
EU, US, Japan launch rare earth WTO case against China
WASHINGTON/BRUSSELS, March 13 (Reuters) - The United States, Europe and Japan joined forces on Tuesday against China's restrictions on exports of rare earth minerals that are critical to production of advanced technology and clean energy goods expected to provide the jobs of the future.
"We want our companies building those products right here in America. But to do that, American manufacturers need to have access to rare earth materials which China supplies," President Barack Obama said at the White House.
Gold edges up on bargain hunting, U.S. dollar weighs
SINGAPORE, March 14 (Reuters) - Gold regained some strength on bargain hunting after prices dropped about 2 percent in the previous session, but a firmer U.S. dollar is likely to cap gains after the Federal Reserve vowed to keep interest rates low until 2014.
"Gold is just caught in a downdraft again after Bernanke didn't really talk about quantitative easing. But there is still this deep-seated theme of central bank buying and strong retail demand from emerging Asia, particularly China," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
METALS-Copper pauses after gains on data, Fed
SINGAPORE, March 14 (Reuters) - Copper prices traded slightly lower on Wednesday, off a one-week high hit in the previous session on upbeat data from the United States and Germany, and the Federal Reserve's acknowledgement of signs of economic recovery.
Copper rose in tandem with other riskier assets in the previous session as data showed solid growth in U.S. retails sector and a jump in German business sentiment.
PRECIOUS-Gold edges up on bargain hunting, U.S. dollar weighs
SINGAPORE, March 14 (Reuters) - Gold regained some strength on Wednesday on bargain hunting after prices dropped about 2 percent in the previous session, but a firmer U.S. dollar is likely to cap gains after the Federal Reserve vowed to keep interest rates low until 2014.
Investors could still ditch gold in favour of the dollar after Fed Chairman Ben Bernanke offered no clues on whether there will be another round of monetary easing, a factor which effectively reduces bullion's safe-haven appeal.
Atlantic activity pushes up Baltic freight index
March 13 (Reuters) - The Baltic Exchange's main sea freight index tracking rates for ships carrying dry commodities rose further on Tuesday, as demand in the Atlantic basin pushed up panamax rates.
The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, rose 7 points or 0.84 percent to 844 points.
Dry bulkers face worst pain in shipping slump-S&P
LONDON, March 13 (Reuters) - The dry bulk shipping sector faces the heaviest oversupply pressures over the next 12 to 18 months compared with the oil tanker and container markets and will be last of the three to recover, Standard & Poor's said on Tuesday.
Ship owners went on an ordering spree between 2007 to 2009 bolstered by earnings as rates in the bulk sector for larger capesize vessels, which carry iron ore and coal cargoes, reached a peak of over $230,000 a day in 2008. Average capesize earnings have slid to just over $5,000 a day this week, below operating cost levels.
Baltic sea index rises more on higher panamax rates
March 12 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for the thirteenth day on Monday, as a spurt in coal and grain shipments pushed up panamax vessel rates.
The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 13 points or 1.58 percent to 837 points.
GLOBAL MARKETS-Increased risk appetite lifts shares after data, Fed
TOKYO, March 14 (Reuters) - Asian shares rose on Wednesday as upbeat U.S. economic data boosted investors' risk appetite, while reduced expectations for further monetary easing from the Federal Reserve underpinned the dollar.
"The U.S. economic picture has clearly brightened, monetary easing efforts have increased liquidity and boosted equities worldwide and despite the fact that Japanese investors are heading into book-closing period, demand remains strong," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
COMMODITIES-Up on economic data, Fed resolve for low rates
NEW YORK, March 13 (Reuters) - Oil hit 11-month highs and most commodities ended up on Tuesday after the U.S. Federal Reserve's stance in keeping interest rates low through 2014 appeased markets already boosted by encouraging U.S. and European economic news.
"The Fed decision is supportive for the oil market," said John Kilduff, partner at Again Capital, a commodities trader in New
OIL-Oil ends at 11-month peak on economic data, Fed
NEW YORK, March 13 (Reuters) - Brent crude prices settled at an 11-month high on Tuesday as improving German economic sentiment, rising U.S. retail sales and the U.S. central bank's reiteration that it plans to keep interest rates low fuelled optimism about growth.
"The Fed decision is supportive for the oil market," said John Kilduff, partner at Again Capital LLC.
NATURAL GAS-US natural gas up 1 pct after touching 10-yr low
March 13 (Reuters) - U.S. natural gas futures rose 1 percent on Tuesday as late short-covering pulled prices off a 10-year low, though a bearish outlook still weighs on sentiment.
"You cannot rule out a $1 price handle. We have no weather demand to speak of in the next two weeks in the major consuming regions," said Gene McGillian, analyst at Tradition Energy in Stamford Connecticut.
EURO COAL-Prices ease along with gas
LONDON, March 13 (Reuters) - Prompt physical coal prices dropped slightly on Tuesday in line with weaker gas, with few fresh trades seen.
"Coal this week has been looking at anything but its own weak fundamentals, sometimes following oil and gas or the warmer weather," one utility source said.
Bank Negara Malaysia (BNM), the Hong Kong Monetary Authority (HKMA) and Euroclear Bank have jointly launched a pilot platform for cross-border investment and settlement of debt securities to be operational on 30 Mar. It would enhance cross-border debt securities settlement efficiency and strengthen the capacity for debt securities issuance activities in the Asian region. (BNM)
Malaysia has shifted its investment focus to more high technology and capital intensive industry-related deals, said Deputy Minister of International Trade and Industry, Datuk Mukhriz Tun Dr Mahathir. "We are also focusing on attracting industries that undertake research and development. We no longer want to attract labour intensive investments. For the past two years, we have been experiencing a steady growth in attracting these kind of investments," Mukhriz said. (Bernama)
Philippine exports grew 3% yoy in Jan (-18.9% in Dec) to US$4.12bn, ending eight months of contraction. Jan's exports were also 21% mom higher. (WSJ)
Moody’s has expressed confidence that the Philippines would manage to further trim its debt burden, hinting again that it was poised to soon upgrade the country’s credit-rating. (Philippine Daily Inquirer)
The University of the Thai Chamber of Commerce has raised its GDP projection for 2012 to 5.9% from the previous prediction of 4.7%. (Bangkok Post)
The Bank of Thailand has raised its crude oil price benchmark for this year to US$140 per barrel from $103.3 per barrel. The core inflation target for 2012 is between 0.5 and 3.0%. The headline inflation for this year should be 3.0% +/- 1.5% pts. (Bangkok Post)
The Commerce Ministry has confirmed that Thailand’s exports in 2012 will grow by 15% but will be negative in 1Q12 given that the sector is still recovering from the flood. (Thai Financial Post)
Indonesia will go ahead with a proposal to control the use of subsidized fuels in the revised 2012 state budget at 40m kiloliters, and would serve as a complement to the government’s plan to raise the price of subsidized fuels by Rp1,500/liter as of 1 Apr. (Antara News)
Singapore is Asia’s most competitive city in attracting businesses, efficiency and promoting a clean environment, according to an Economist Intelligence Unit report commissioned by Citigroup Inc. (Bloomberg)
The China Manpower Survey increased to 19% in 2Q12 from 17% in 1Q12, indicating that employers in China intended to add jobs. There were also improvements in hiring conditions in other economies like India (48% in 2Q from 41% in 1Q) and Singapore (20% in 2Q from 16% in 1Q). Job seekers in 23 of 41 economies surveyed can expect a faster pace of hiring in 2Q compared with 1Q. (Bloomberg, Reuters)
The cash reserve requirement imposed on banks by China's central bank can be injected into the stock market to boost investor confidence, Jiang Lianhai, a deputy to the National People's Congress said. (China Daily)
The People's Bank of China said that commercial banks should put in place a differentiated credit policy to guarantee housing loans to qualified first-home buyers. (Xinhua)
The Bank of Japan (BOJ) left its key policy rate unchanged and decided to expand a loan program for potentially high-growth sectors in a bid to stimulate the economy. As part of the ¥2tr (US$24.31bn) expansion, BOJ will use its foreign-currency assets to offer ¥1tr worth of loans denominated in US$ for the first time. BOJ will also extend the application period for the loans by two years to Mar 2014. (WSJ)
Bank of Japan Governor Masaaki Shirakawa and his board yesterday rejected one member’s suggestion to build on the ¥10tr (US$121bn) of additional government-bond purchases announced 14 Feb as “the Bank of Japan doesn’t change its monetary policy because it’s mindful of political pressure,” adding that bending to politicians would be “suicide.” (Bloomberg)
Japan received approval from China's government to purchase Rmb65bn in Chinese government debt in a move that can help Japan diversify its reserves away from the dollar and strengthen economic ties between the two Asian countries. Finance Minister Jun Azumi said the timing of purchases hasn't been set yet as Japan still needs to make some administrative preparations, but it will likely start with a small amount and then increase purchases. (Reuters)
South Korea: Unemployment rate rose to 3.7% in february
South Korea’s unemployment rate unexpectedly jumped to the highest level in almost a year as college graduates entered the labor market and government job openings encouraged more people to seek work. The jobless rate rose to 3.7% in February from 3.2% the previous month, Statistics Korea said in Gwacheon today. The median estimate in a Bloomberg News survey of 11 economists was for the rate to stay at 3.2%. Policy makers are grappling with a slowing economy by supporting the job market, accelerating spending and keeping interest rates unchanged for a ninth month. The Bank of Korea said last week the economy appears not to be slowing further and will likely return to its long-term growth track, although downside risks persist because of Europe’s debt crisis and higher oil prices. (Bloomberg)
Australia: Consumer confidence slumps 5%, most in three months
Australian consumer confidence fell the most in three months after the nation’s four biggest lenders raised mortgage rates even as the central bank left the benchmark borrowing cost unchanged, a private survey showed. The sentiment index for March dropped 5% to 96.1, the lowest level since December, Westpac Banking Corp. and Melbourne Institute survey taken 5-9 March of 1,200 consumers showed today in Sydney. (Bloomberg)
EU: German investor confidence surges to a 21-month high
German investor confidence jumped to a 21-month high in March after the European Central Bank flooded financial markets with cash and the sovereign debt crisis showed signs of abating. The ZEW Center for European Economic Research in Mannheim said today its index of investor and analyst expectations, which aims to predict economic developments six months in advance, advanced to 22.3 from 5.4 in February. That’s the fourth straight increase and the highest reading since June 2010. Economists forecast a gain to 10, according to the median of 36 estimates in a Bloomberg News survey. (Bloomberg)
ECB President Mario Draghi called on banks to make the most of a lull in the sovereign debt crisis and “strengthen their resilience further, including by retaining earnings, cutting dividends and bonuses” as he seeks to get the ECB back to its main job of ensuring price stability. He also exhorted governments to “make further progress on their program of economic reform” as the ECB’s work “needs to be complemented by the work of national policy makers.” (Bloomberg)
Euro-area finance ministers signed off on a second Greek bailout, clearing the way for the first payment from the €130bn package to be made this month. (Bloomberg)
US: Retail sales climb by most in five months
Americans heartened by an improving labour market boosted spending at stores and malls by the most in five months, adding to signs that the world’s largest economy is gaining strength. The 1.1% advance followed a 0.6% increase in January that was larger than previously estimated, according to Commerce Department data issued yesterday in Washington. Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based. Stocks and bond yields rose as the report indicated that the best six-month streak of employment growth since 2006 is bolstering spending even as gasoline costs rise. Job gains have not been large enough to satisfy Federal Reserve officials, who today reaffirmed a commitment to keep interest rates low. (Bloomberg)
US: Fed says labour market improves, leaves policy unchanged
Federal Reserve policy makers raised their assessment of the economy as the labour market gathers strength and refrained from new actions to lower borrowing costs. “The unemployment rate has declined notably in recent months but remains elevated,” the Federal Open Market Committee said in a statement at the conclusion of a meeting yesterday in Washington. It also said, “strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook”. (Bloomberg)
The US Federal Reserve said 15 of the 19 largest US banks could maintain adequate capital levels even in a severe recession scenario that assumes they continue to pay dividends and buy back stock. The Fed said an unemployment rate of 13%, a 50% drop in stock prices and a 21% decline in house prices under the stress scenario would produce aggregate losses of US$534bn over nine quarters, but the 19 banks would see their tier one common capital ratio only falling to 6.3% in 4Q13, above the 5% minimum the Fed required (10.1% in 3Q11). (Bloomberg)
The US budget deficit this year will swell by an additional US$92bn from estimates made in Jan to US$1.171tr after Congress later extended a payroll tax cut without reducing spending elsewhere, the nonpartisan Congressional Budget Office said. (Reuters)
Stocks record biggest gains of year; Dow up 218 pts
Bank stocks turbocharged a rally across the financial markets Tuesday, and all three major stock indexes posted their biggest gains of the year. The Dow Jones industrial average rose 218 pts and closed at 13,177.68, its highest level since the last day of 2007. The Nasdaq composite closed above 3,000 for the first time since Dec 2000, when dot-com stocks were collapsing. There was already plenty of good news driving the market higher Tuesday: Retail sales in Feb increased the most since Sept, and the Federal Reserve said it expected the unemployment rate to keep falling. (Bloomberg)
MAS set for growth as India JV gets clearance for take-off
Malaysian Airlines System (MAS) expects further growth potential through its involvement in the Indian aviation maintenance, repair and overhaul space through MAS GMR Aero Technic Ltd (MGAT) – a joint venture between MAS and GMR Hyderabad International Airport Ltd. MAS senior vice president Khairuddin Hamzah said MGAT received the approval of the European Aviation Safety Agency (EASA) last week, enabling it to service all aircraft leased from European by Indian operators. (Malaysian Reserve)
Notion VTec buys RM17.5m land in Klang, acquires subsidiary
Notion Vtec subsidiary Notion Ventures SB (NVSB) has entered into a sale and purchase with Dulon Industries SB for the purchase of a land in Klang together with an industrial factory for RM17.5m. The proposed acquisition would allow NVSB to expand its manufacturing operations. It is a cost effective measure contributing to enlarged economies of scale to expand and maintain the operations. (Malaysian Reserve)
Nicorp to participate in Shell LPG business buy
Naim Indah Corp (Nicorp) has been invited to participate in the purchase of Shell Malaysia liquefied petroleum gas (LPG) business and assets. Oman-based National Gas Company (NGC) recently won the bid to buy Shell Malaysia Trading SB’s LPG business for an estimated RM275m. NGC in partnership with Aspire SB set up a 40-60 special purpose vehicle to undertake the proposal. (BT)
IJM buys 20% of West Coast Expressway
IJM Corp is buying a 20% equity interest in West Coast Expressway SB (WCE) for RM6.75m. In an announcement to Bursa Malaysia, IJM said its wholly-owned subsidiary Road Builder (M) Holdings SB has entered into a share sale and purchase agreement with Prominent Xtreme SB for the 20% in WCE, consisting of 5.8m RM1 shares. In late January, WCE received an approval letter from the Public Private Partnership Unit of the Prime Minister’s Department to undertake the proposed privatization of the construction of the West Coast Expressway. The approval was based on a build-operate-transfer basis. (Financial Daily)
Another motion for AsiaEP EGM
AsiaEP Resources Bhd’s major shareholders, which collectively hold 11.05% of the shares in the company, have requested for an EGM following the company’s cancellation of a private placement exercise. According to an announcement to Bursa Malaysia, the shareholders have requested that disclosures in relation to the exercise be made at an EGM to be held on 6 April, which will also see another motion being tabled. (StarBiz)
An E&O Bhd minority shareholder is arguing that a judge’s former job in the Securities Commission (SC) has no bearing on his suit against the regulator for failing to compel conglomerate Sime Darby to buy remaining shares after it bought a 30% stake in the property developer for RM776m. Michael Chow Keat Thye has filed two affidavits in reply to the SC’s objections to his suit, with one arguing that the regulator’s objections are on technical issues and that their decision that Sime Darby was not required to make a mandatory general offer was a “tentative decision”. (Malaysian Insider)
Tenaga Nasional Bhd is confident the government will find the best solution to resolve the compensation issue for the benefit of all said President and CEO Datuk Seri Che Khalib Mohamad Noh. "We are looking for a solution to the problem. All the parties concerned understand. I don't think we have to worry. For sure, Tenaga believes that the government will find the best solution for the benefit of every party involved". Meanwhile, Chairman Tan Sri Leo Moggie said the issue would be resolved by the government. "The government has a role to determine the method and the payment for the gas price to ensure continued supply of electricity in the country," he said, adding that the utility company had expressed its views during discussions with the government. (BT)
AirAsia X will have to refund the monies forwarded to it under a joint marketing plan with Christchurch International Airport (CIAL). According to CIAL CEO Jim Boult, the fund provided to AirAsia X covers a variety of marketing initiatives tailored to suit its specific circumstances. AirAsia X is working with Air New Zealand on proposals to offer travellers who had already booked beyond the end of May flights to Christchurch via Australia. (BT)
UMW Group's unit, UMW Lubricant International, expects to rake in up to RM50m in sales this year, underpin by the launch of the new Repsol lubricants for passenger and commercial vehicles as well as industrial use. (Bernama, BT)
Maxis introduced 20 new exclusive applications for smart devices such as iPhones, tablets and Androids. The applications present a user-friendly interface for customers seeking useful local content for their smart devices. (BT)
Technip, a world leader in project management, engineering and construction in the energy industry has been awarded a front-end engineering design contract by Petronas for its proposed RM60bn refinery and petrochemical integrated development (Rapid) project in Johor. The contract is schedule for completion by 2013.
Ramunia received a letter of award worth RM23.63m from Aquaterra Energy. The contract is for the fabrication of wellhead support structures consisting of two subsea structures, one topside structure and a boat landing facility for the West Desaru project. (Financial Daily)
Preliminary findings by an accounting firm called in to review Silver Bird Group Bhd’s affairs indicate that the bread and confectionery maker remains a going concern, which means there is no reason to believe that the business will come to a halt anytime soon. Encouraged by this, the directors are working to keep the operations going and to restore confidence. The board's immediate priorities are to restructure the company's debts, to recruit an executive to lead the company full-time, and to figure out what to do next if it is established that Silver Bird has a sizeable capital shortfall. However, a big if hovers over all these. PKF Advisory Sdn Bhd, the firm appointed on Feb 26 to conduct a forensic audit of Silver Bird after alleged financial irregularities had been detected, needs at least three months to finish its assignment. Only then can the listed company's actual financial position be known. Sources said PKF's work was hampered by the lack of documentation and incomplete data. (Starbiz)
MMC Corp Bhd has asked for more time to complete the proposed listing of Gas Malaysia Bhd on the Main Market but still expects the exercise to be completed by the second quarter of this year. (Financial Daily)
Dutch Lady Milk Industries Bhd has appointed Rahul Colaco managing director effective April 1. Colaco, now marketing director, has 16 years’ experience in multinational corporations across Europe and Asia and has held various senior positions in marketing, sales, purchasing and finance. (Starbiz)
Xidelang Holdings Ltd, a sports shoes and apparels maker, expects its first quarter financial performance to be stronger this year, as demand for sportswear in China remains strong. "We are optimistic of a good first quarter results ... better than last year's," said managing director Mark Ding Peng Peng. (BT)
Maybank: Maybank Islamic to expand in Indonesia, Singapore. MAYBANK Islamic Bhd (MIB), already the region's largest Islamic bank by asset size, is pursuing an aggressive stance to further strengthen its presence in Indonesia and Singapore. Chief executive officer Muzaffar Hisham said after giving priority to its domestic operations in the last few years, MIB will be focusing more on growing its regional business this year. "We want to deep-dive into key markets especially Indonesia and Singapore," he said in an interview with Business Times, adding that Maybank group's acquisition of Singapores brokerage ﬁrm Kim Eng has opened opportunities for MIB too. (Source: Business Times)
IRM Group: IRM gets OK to set up solar station. Plastics manufacturer IRM Group Bhd has been granted the feed-in approval by the Sustainable Energy Development Authority (Seda) to install a solar power station with a maximum capacity of 5MW in Kangar, Perlis. The Feed-In-Tariff is scheduled to commence on 9 April 2013 for a period of 21 years from the commencement date. IRM Solar will also be signing a Power Purchase Agreement with SEDA / Tenaga Nasional Berhad (TNB) for the sale of electricity generated to TNB in due course. (Source: Bursa Malaysia)
Naim Indah Corp Bhd: To participate in Shell LPG business buy. Naim Indah Corp Bhd (Nicorp) has been invited to participate in the purchase of Shell Malaysia liquefied petroleum gas (LPG) business and assets.Oman-based National Gas Company (NGC) recently won the bid to buy Shell Malaysia Trading Sdn Bhd's LPG business for an estimated RM275 million. (Source: Business Times)
O&G: Halliburton, Petronas sign exploration deal. HALLIBURTON, one of the world's largest oilfields service companies, has teamed up with Petronas Carigali Sdn Bhd, the exploration and production arm of Petroliam Nasional Bhd (Petronas), to explore the potential of shale oil and gas resources in Asia Pacific. "This collaboration will enable Petronas Carigali to shorten its in-house capability development by leveraging on Halliburton's technology and experience outside of North America," Halliburton said in a statement. (Source: Business Times)
The Employees Provident Fund (EPF) has denied any unusual activity in its recent surge in share disposals that dragged the share market down last week. This comes after it was reported that the EPF along with its portfolio managers "dumped" a total 83.68m shares on the open market on March 7, or about half the total daily trading volume which pulled down the benchmark FBM KLCI. The move by EPF also sparked market rumours that the share disposals was timed with the next general election in mind as some analysts say that profit taking usually occurs just before the polls. (Malaysian Insider)
YTL Cement: Minorities shareholders could derail plans
Despite several extensions, YTL Corp has still fallen short of reaching the required threshold for a compulsory acquisition of the remaining shares it does not own in YTL Cement. This means that YTL Corp will not be able to wholly-own the cash rich cement manufacturer, as a group of minority shareholders did not take up the takeover offer by the conglomerate. In other words, YTL Cement will remains a public company, But not listed and YTL Corp will have to seek minority shareholders’ approvals on plans YTL Corp intends to execute on the cement manufacturer. (Financial Daily)
TSM Global: Will consider other offers for its business
TSM Global’s board will consider other credible offer for its business after West River Capital Sdn Bhd (WRC) rejected its request to improve on the RM1.25 apiece buyout offer for all its asset and liabilities. In a statement to Bursa Malaysia on Tuesday, the company said its board memebers who are independent of the offer have resolved to consider any other credible offers for the business and its undertaking, including all asset and liabilities. Meanwhile, the deadline for the acceptance of the offer from WRC has been extended to Apr 6. (Financial Daily)
Gefung Holdings: Golden Knights International emerges as substantial shareholder
Bahamas-registered Golden Knights International Ltd has emerged as a substantial shareholder in Gefung Holdings with a 5.11% stake or 13.50m shares. A filing with Bursa Malaysia showed that it accepted its entitlement of 7.5m shares under a rights issue on Jan 20, 2012. (Financial Daily)
The Employees Provident Fund (EPF) sold a further RM288m worth of shares on March 8, after selling RM441.09m worth a day earlier. According to filings with Bursa Malaysia, the fund managers engaged by the EPF disposed of a total 49.88m shares, while also acquiring 10.58m shares. Among the EPF's biggest disposals on March 3 were 8.08m shares in Petronas Chemicals Bhd, 7m shares in YTL Corp Bhd and 4m shares in CIMB Bank Bhd. A source close to the EPF explained that the pension fund took profit to lock up gains after the benchmark FBM KLCI neared an all-time high of 1,594.74 points. (Starbiz)
Asian Stocks Gain on U.S. Retail Sales, Fed U.S. Outlook (Source: Bloomberg)
Asian stocks rose after U.S. retail sales jumped by the most in five months and the Federal Reserve raised its assessment of the world’s biggest economy, boosting the earnings outlook for Asian exporters. Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, rose 2.3 percent in Tokyo. James Hardie Industries SE (JHX), an Australian supplier of building materials that gets more than half of its sales from the U.S., climbed 4.1 percent in Sydney. Samsung Electronics Co., South Korea’s No. 1 consumer electronics exporter, advanced 1.8 percent in Seoul after iSuppli said the company will supply the touch screen for Apple Inc.’s new iPad. The MSCI Asia Pacific Index rose 0.8 percent to 127.88 as of 9:41 a.m. in Tokyo, with about 14 stocks climbing for each that fell. All 10 industry groups in the gauge rose. The index gained 11 percent this year through yesterday amid signs the U.S. economy is recovering and China is easing its monetary policy.
“The U.S. economy is generating jobs again and that’s helping boost household income, and I think the Fed’s comments recognize the improvement in the U.S. economy,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “To a large degree, Asia takes a short-term lead from the U.S. We should see gains in Asian markets today.”
Japan Stocks Rise on U.S. Retail Data; Fed Lifts Outlook (Source: Bloomberg)
March 14 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) set for the highest close since July, after U.S. retail sales jumped and the Federal Reserve raised its economic assessment for the world’s biggest economy. Toyota Motor Corp. (7203), a carmaker that gets 28 percent of its sales in North America, rose 2.2 percent after the yen fell to its lowest against the dollar since April. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender, advanced 2.4 percent after the Fed said 15 of the 19 largest U.S. banks have enough capital to weather another recession, boosting confidence in the global financial system. Inpex Corp. (1605), Japan’s No. 1 energy explorer, advanced 1.4 percent after oil prices rose. The Nikkei 225 Stock Average rose 1.9 percent to 10,085.47 as of 9:12 a.m. in Tokyo. The broader Topix Index gained 1.8 percent to 860.52 with all 33 industry groups on the measure gaining.
“The U.S. economy is generating jobs again and that’s helping boost household income, and I think the Fed’s comments recognize the improvement in the U.S. economy,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “Japan has benefited from the perception that the yen has peaked for now and that’s helping the Japanese share market.”
Dow Rises to Highest Level Since 2007 (Source: Bloomberg)
U.S. stocks advanced, sending the Dow Jones Industrial Average to the highest level since 2007, amid data showing that retail sales increased by the most in five months and as JPMorgan Chase & Co. (JPM) boosted its dividend. JPMorgan surged 7 percent after also unveiling a $15 billion buyback. Bank of America Corp. (BAC) and Goldman Sachs Group Inc. (GS) rose at least 6.2 percent. Citigroup Inc. (C), which rallied 6.3 percent, slumped 3.3 percent after the close of regular trading as it failed to meet the Federal Reserve’s minimum requirements in a stress test. Apple Inc. (AAPL) climbed 2.9 percent as Jefferies Group Inc. raised its share-price estimate to $699.
The Standard & Poor’s 500 Index added 1.8 percent to 1,395.95 at 4 p.m. New York time. The Dow advanced 217.97 points, or 1.7 percent, to 13,177.68, rising a fifth day. The Nasdaq Composite Index gained 1.9 percent to 3,039.88, the highest level since 2000. (CCMP) About 7.5 billion shares changed hands on U.S. exchanges, 13 percent above the three-month average. “You have the sweet spot,” said Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees more than $1.6 billion. “As we come to the end of the quarter, people sit down and say: do we own equities? The answer is no. To the extent that the Fed is not going to get in the way of stronger banks boosting dividends or doing share buybacks, that helps that sector. Yet the real leadership is in some of the more economically sensitive areas.”
European Stocks Advance as U.S. Retail Sales Increase (Source: Bloomberg)
European (SXXP) stocks advanced, with the Stoxx Europe 600 Index climbing to the highest since July 26, as reports showed German investor confidence in March increased more than forecast and American retail sales rose in February. Raiffeisen Bank International AG (RBI) and UniCredit SpA (UCG) led lenders higher. Eramet SA, the operator of the world’s biggest ferro-nickel plant, gained with metal prices. Antofagasta Plc (ANTO) fell after full-year profit missed analysts’ estimates. The Stoxx 600 (SXXP) added 1.8 percent to 269.56 at the close, after euro-area finance ministers signed off on a second bailout for Greece. The benchmark index has rallied 10 percent so far this year.
“The sky is brightening,” said Jerome Forneris, who helps manage $11 billion at Banque Martin Maurel in Marseille. “There have been some very good economic indicators in northern Europe. We hope that Germany will lead other countries higher. The U.S. economy is improving and that is helping the market. The stress from the sovereign-debt crisis that weighed on stocks is disappearing. The appetite for stocks has returned.”
Dollar supported ahead of Fed on brighter economic outlook
TOKYO, March 13 (Reuters) - The U.S. dollar hovered just below a seven-week high against a basket of currencies, bolstered by expectations that a string of encouraging economic news should persuade the U.S. Federal Reserve not to apply fresh stimulus, at least for now. "When you look at recent U.S. economic numbers, it will be difficult to argue for an immediate easing," said Koji Fukaya, chief currency strategist in Credit Suisse in Tokyo.
Dollar Near 4-Week High as Fed Raises Economic Assessment (Source: Bloomberg)
The dollar strengthened against all its major counterparts after Federal Reserve policy makers raised their assessment of the U.S. economy and refrained from additional monetary easing. The yen touched an 11-month low versus the greenback as the two-year yield gap between the U.S. and Japan widened to the most since July after the Bank of Japan (8301) signaled yesterday it will keep using stimulatory tools to tackle deflation. The yen also weakened as Asian stocks extended a global rally, damping demand for the lower-yielding currency. “We should start to see signs of recovery in the U.S. economy being more dollar supportive,” said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “What is clear after the Fed statement is the fact that Treasury yields are moving higher and the dollar is being supported, and that’s the story we expect to continue over the next few weeks and the next month.”
The dollar rose 0.3 percent to 83.17 yen as of 9:53 a.m. in Tokyo from the close in New York yesterday. It reached 83.18, the strongest level since April 18. The U.S. currency added 0.1 percent against the euro to $1.3068. The yen slid 0.2 percent to 108.69 per euro, extending a 0.3 percent drop yesterday.
Fed Says Labor Market Improves; Policy Unchanged (Source: Bloomberg)
Federal Reserve policy makers raised their assessment of the economy as the labor market gathers strength and refrained from new actions to lower borrowing costs. “The unemployment rate has declined notably in recent months but remains elevated,” the Federal Open Market Committee said in a statement at the conclusion of a meeting today in Washington. It also said “strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook.” Stocks advanced, sending the Dow Jones Industrial Average toward its highest closing level since 2007, after the Fed statement and as JPMorgan Chase & Co. increased its dividend. The best six-month streak of job growth since 2006 prompted Fed Chairman Ben S. Bernanke to acknowledge an improved path for the economy, even as policy makers repeated that unemployment is likely to stay high enough to warrant keeping borrowing costs “exceptionally low” at least through late 2014.
“The Fed still doesn’t know which way the economy will go,” Roberto Perli, a former senior staff economist at the Fed, said in an interview on “The Hays Advantage” on Bloomberg Radio. “Therefore I think they’re more inclined to ease than they are to tighten.”
U.S. Retail Sales Rose in Feb. by Most in 5 Mos. (Source: Bloomberg)
Americans heartened by an improving labor market boosted spending at stores and malls by the most in five months, adding to signs that the world’s largest economy is gaining strength. The 1.1 percent advance followed a 0.6 percent increase in January that was larger than previously estimated, according to Commerce Department data issued today in Washington. Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based. Stocks and bond yields rose as the report indicated that the best six-month streak of employment growth since 2006 is bolstering spending even as gasoline costs rise. Job gains have not been large enough to satisfy Federal Reserve officials, who today reaffirmed a commitment to keep interest rates low.
Consumers are “unfazed by higher gas prices,” said Jonathan Basile, an economist at Credit Suisse in New York, who correctly forecast the increase in spending. “This is a pleasant surprise on the overall picture for the economy. For the Fed, it’s steady as she goes. They will be encouraged, but there is still a long way to go.”
U.S. Job Openings Were Little Changed From Highest Since 2008 (Source: Bloomberg)
Job openings in the U.S. were little changed in January, capping the strongest two months in more than three years, a signal businesses remain confident about the economic expansion. The number of positions waiting to be filled totaled 3.46 million, down from a revised 3.54 million in December that was higher than previously estimated, the Labor Department said today in a statement posted on its website. The back-to-back reading was the highest since mid-2008. Better job prospects may lure more people into the labor market, helping restore some of the 5.3 million jobs yet to be recovered after the recession. February marked the third consecutive month with payroll growth above 200,000, Labor Department data showed last week.
“Employment begets income, income begets spending and spending begets more employment,” Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York, said before the report. “We’re at the point now where a virtuous cycle has begun, and any additional employment gains serve to strengthen that feedback loop.”
Fed Wields Expanded Supervisory Powers With Bank Stress Tests (Source: Bloomberg)
The Federal Reserve, exercising sweeping new authority to ensure financial stability, will show how the capital of the 19 largest U.S. banks might fare through a deep recession and a second housing crisis and use the results to dictate which of them can increase their dividends. The U.S. central bank has conducted increasingly detailed tests of bank capital planning with the goal of assuring banks can survive an economic storm without the taxpayer-funded bailouts that sparked a political backlash following the 2008 financial crisis. The Fed will release the results of the so-called stress tests at 4:30 p.m. on March 15, it said in a statement yesterday in Washington. The tests will show results for revenues, capital ratios and profits or losses at each firm over a nine-quarter period.
“The industry has a record amount of capital and much cleaner balance sheets than two years ago,” said Jason Goldberg, senior analyst at Barclays Capital Inc. in New York. The results “are going to show the banking industry is on solid ground.”
Obama Says China Rare-Earths Case Is Warning for WTO Violators (Source: Bloomberg)
President Barack Obama said his decision to challenge China’s export limits on rare-earth minerals at the World Trade Organization is part of his quest to make the U.S. more competitive in the global economy. “Being able to manufacture advanced batteries and hybrid cars in America is too important for us to stand by and do nothing,” Obama said in the White House Rose Garden this morning. “Our competitors should be on notice: You will not get away with skirting the rules.” The U.S., EU and Japan requested consultations with China, a step that will lead the governments to ask WTO judges to rule should negotiations fail to resolve the issue. China produces at least 90 percent of the world’s rare earths, 17 chemically similar metallic elements used in Boeing Co. (BA) helicopter blades, Nokia Oyj (NOKIA) cell phones, Toyota Motor Corp. hybrid cars and wind turbines. China says it curbed output and exports to conserve resources and protect the environment.
In a similar case, the WTO found in July that Chinese limits on raw-materials exports broke global rules and gave domestic companies an unfair advantage. WTO appellate judges in January upheld the ruling, which supported a complaint by the U.S., the EU and Mexico. U.S. Trade Representative Ron Kirk called that report a “tremendous victory.”
Shirakawa Seeks to Distance Bank of Japan From Political Push (Source: Bloomberg)
Japan’s central bank chief sought to distance monetary policy from political pressure after stimulus implemented last month stoked speculation the government’s sway is increasing. Governor Masaaki Shirakawa and his board yesterday rejected one member’s suggestion to build on the 10 trillion yen ($121 billion) of additional government-bond purchases announced Feb. 14. Officials instead expanded loans designed to boost long-term growth. Shirakawa told reporters after the meeting that bending to politicians would be “suicide.” The unprecedented size of last month’s move proved a success in diminishing risks for Japan’s exporters, by sending the yen tumbling further from the postwar high against the dollar reached in October. At the same time, boosting government-debt purchases risks fueling concern that the BOJ is moving closer to financing the nation’s deficit spending, according to JPMorgan Chase & Co. (JPM)
“The BOJ is eager to secure its independence from the government,” said Junko Nishioka, an economist at RBS Securities Japan Ltd. who has worked for the central bank. After opting for action outside of the main asset-purchase program yesterday, the bank may expand that stimulus “in the near future,” perhaps at a meeting next month, she said.
French Inflation Rate Declines for Second Month as Economy Slows (Source: Bloomberg)
France’s inflation rate fell for a second month in February as a slowing economy outweighed the impact of higher energy prices. Consumer prices rose 2.5 percent from a year earlier based on European Union methodology, compared with a 2.6 percent increase in January and a 2.7 percent gain in November, Paris- based national statistics office Insee said today. Economists had forecast a rate of 2.6 percent, the median of 18 estimates in a Bloomberg News survey showed. Prices rose 0.5 percent in the month after declining 0.4 percent in January. With London crude-oil prices up 16 percent this year and the French government seeking more revenue through sales-tax increases, prices may keep rising in euro area’s second-largest economy. The European Central Bank raised its average 2012 inflation forecast for the region last week to 2.4 percent from 2 percent in December even as it reduced its growth outlook.
“We see upward risks coming from higher-than-expected oil prices,” ECB President Mario Draghi said last week. “Owing to rises in energy prices and indirect taxes, inflation rates are now likely to stay above 2 percent in 2012, with upside risks prevailing,” he added.
German Investor Confidence Surges as Debt Crisis Eases (Source: Bloomberg)
German investor confidence jumped to a 21-month high in March after the European Central Bank flooded financial markets with cash and the sovereign debt crisis showed signs of abating. The ZEW Center for European Economic Research in Mannheim said today its index of investor and analyst expectations, which aims to predict economic developments six months in advance, advanced to 22.3 from 5.4 in February. That’s the fourth straight increase and the highest reading since June 2010. Economists forecast a gain to 10, according to the median of 36 estimates in a Bloomberg News survey.
Germany’s benchmark DAX share index is up 18 percent this year, outperforming its main European counterparts as investors bet the region’s largest economy will return to growth after shrinking in the fourth quarter of 2011. The ECB’s injection of more than 1 trillion euros ($1.3 trillion) of three-year loans into the banking system in an attempt to unlock credit for companies and households is also helping to fuel a rally on European bond markets. “Investors have obviously buried any German recession concerns,” said Carsten Brzeski, an economist at ING Group in Brussels. “The ECB loans, progress on solving the crisis and the latest rally on stock markets have more than offset the negative impact from higher oil prices and the fact that the cold winter may have damped growth in February.”
Weidmann Says ECB Looking at Ways to Exit From Crisis Tools (Source: Bloomberg)
European Central Bank council member Jens Weidmann said policy makers are already discussing ways to withdraw some of the emergency cash they injected into the banking system to fight the sovereign debt crisis. “All council members are aware that non-standard measures create risks and have to be unwound,” Weidmann, who heads Germany’s Bundesbank, said at a press conference in Frankfurt today. “We need this discussion and it is taking place. The timeframe depends on several things, including how the environment develops.” The ECB has loaned banks more than 1 trillion euros ($1.3 trillion) for three years at its benchmark rate, which is currently at a record low of 1 percent, swelling its balance sheet to more than 3 trillion euros in the process. The Bundesbank has set aside an additional 4.1 billion euros to cover risks stemming from the ECB’s crisis-fighting measures, which include 218 billion euros of government bond purchases.
Weidmann wrote a letter to ECB President Mario Draghi about the risks the central bank is taking, fueling speculation of a rift. He said today he has a “good relationship” with Draghi and doesn’t feel “discouraged or isolated” on the ECB’s 23- member council. The “risks and side effects” of the ECB’s three-year loans “are known to colleagues,” he said.
Draghi Says Crisis Lull Must Spur Governments, Banks to Act (Source: Bloomberg)
European Central Bank President Mario Draghi called on banks and governments to make the most of a lull in the sovereign debt crisis as he seeks to get the ECB back to its main job of ensuring price stability. Policy makers “see continued signs of stabilization” in the economy and banks “should use this currently more benign environment to strengthen their resilience further, including by retaining earnings, cutting dividends and bonuses,” Draghi said in a speech in Paris today. “The financial system should serve the economy, not the other way round.” The ECB has shouldered the main burden of fighting the three-year-old crisis by keeping banks afloat, cutting interest rates to a record low and buying distressed governments’ bonds. The unprecedented measures have swelled its balance sheet to more than 3 trillion euros ($3.9 trillion), prompting Bundesbank President Jens Weidmann to write a letter to Draghi warning that the central bank may be taking on too much risk.
Draghi appealed to the governments, saying that the ECB’s contribution “needs to be complemented by the work of national policy makers” and that “countries should use this phase of financial stabilization to make further progress on their program of economic reform.”
Soybeans (Source: CME)
US soybean futures end higher, challenging last week's highs amid firm world prices and the need for adequate US soy acres in 2012. The focus of the market is shifting to new crop planting, but concerns about additional cuts to South American crop size generating fresh export demand, and that helped rekindle bullish momentum, analysts say. Firm cash prices underpinned futures as well. Soy products climbed in unison with soybeans, with traders regaining bullish outlooks on technical buying, firm overseas prices and optimistic outlooks for demand, analysts say. CBOT May soybeans ended up 14 1/4c at $13.48 3/4/bushel.
Soybean Meal/Oil (Source: CME)
May soymeal rose $4.00 to $366.10/short ton, and May soyoil ended up 0.91c to 54.87 cents/lb.
Palm Oil to Climb to One-Year High as Cooking-Oil Supply Drops (Source: Bloomberg)
Palm oil, used in everything from candy bars to instant noodles, will advance 4 percent to the highest in more than a year by June as cooking-oil supplies drop to the lowest in more than three decades, a survey showed. The tropical oil may gain to 3,500 ringgit ($1,153) a metric ton from 3,365 ringgit at the close yesterday on the Malaysia Derivatives Exchange, according to the median estimate in a Bloomberg survey of 10 analysts and traders who attended a conference in Kuala Lumpur last week. Inventories of palm, soybean, rapeseed and six other oils will drop below 30 days of consumption this year, the fewest since 1977, U.S. Department of Agriculture data show. Global food prices rose for a second consecutive month in February on higher costs for cereals, cooking oils and sugar, as shown by the index of 55 food items tracked by the United Nations’ Food and Agriculture Organization.
“The stocks-to-usage ratio is going to be much lower this year, so that will boost prices,” said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based commodities trader, who predicts a high of 3,700 ringgit. Futures climbed as high as 3,370 ringgit yesterday, the most expensive since June 7. Prices have gained 6 percent this year compared with a 1.5 percent advance in the Standard & Poor’s GSCI Agriculture Index of eight commodities. The commodity last reached 3,500 ringgit in March last year.
The UN food index increased 1.2 percent in February from a month earlier and the gauge of edible oils and fats rose 2.1 percent. The cost of food may remain near current levels in coming months as demand drains increased supply, Abdolreza Abbassian, a senior FAO economist, said March 8. The edible oil may climb to a four-year high of 4,000 ringgit ($1,317) by June and then drop to $1,150 to $1,200 on a free-on-board basis, according to Dorab Mistry, director at Godrej International Ltd., who has traded the commodity for three decades. Michael Coleman, managing director at Aisling Analytics Pte, said last month the price may climb to $1,300. While global palm-oil output is set to increase 2.3 million tons this year, that won’t be enough to counter lower production of other oils including soybean and rapeseed, Thomas Mielke, executive director Oil World, said March 7. Global soybean production may drop by 20 million tons to 245.53 million tons after drought hurt crops in South America, he said.
Palm oil output in Malaysia, the second-biggest grower, is expected to climb to 19.4 million tons this year from a record 18.9 million tons in 2011, according to the Malaysian Palm Oil Board. From March, output each month will be less on a year-on- year comparison due to a low output cycle, leading to “flat” growth of as much as 19 million tons in 2012, Mistry estimates. Production in Indonesia, the largest grower, will increase by about 1.4 million tons to 26.5 million tons in 2012, he said. With crude oil trading above $100 a barrel and signs that the U.S and European Union economies are stabilizing, palm oil may climb as more investors buy commodities, said Bajoria. “There is so much liquid money throughout the world, through the hedge funds and the new money injected via the European central bank,” he said. “The money travels to the destinations where the best returns can come.”
Palm oil perks up on crude, looming U.S acreage battle
KUALA LUMPUR, March 13 (Reuters) - Malaysian crude palm oil futures edged up on Tuesday, as traders bet energy markets would hold firm and eyed the outlook for U.S. corn plantings, which could take more acreage from soybeans and limit global edible oil supply this year.
"The market is looking at the U.S. acreage battle that comes up in a couple of weeks. The palm oil price moves will be determined by external events, be it the Fed, crude oil, and U.S. soy," said a trader with a foreign brokerage in Kuala Lumpur.
India's Feb refined palm oil imports to treble
NEW DELHI, March 12 (Reuters) - India's refined palm oil imports nearly trebled in February from the previous month after changes in Indonesia's export taxes and this pace could continue, putting refiners in the world's largest edible oils importer at risk of closure.
Total palm oil imports -- the bulk of India's edible oil purchases -- rose 28 percent last month to 654,167 tonnes, according to the average of a survey of eight traders, with soyoil imports seen up 69.7 percent over January.
Indonesia’s policy to boost shipments of processed palm oil by charging lower export duties than on crude palm oil is hurting margins for refiners in Malaysia, Oil World said. The differential export-tax rate has given Indonesian processors a competitive advantage against Malaysian palm-oil refiners, the oilseed researcher said in a report. “It is obviously the ultimate goal of the Indonesian government to process domestically a much larger portion of the country’s crude palm oil production by setting this differential export-duty regime,” it said. Duty-free exports of crude palm oil make Malaysia’s domestic refiners even worse off, and refining margins in the country turned negative in recent weeks, the report showed. “Particularly the standalone refiners are in a very critical situation, while those refineries integrated into a plantation can survive owing to the profits made from the production of crude palm oil,” the researcher said. Refiners in India and China also face slipping margins as a result of Indonesia’s policy on taxing exports of processed palm oil. (Bloomberg)
Better supplies to drive world food prices lower in 2012
MILAN, March 12 (Reuters) - Improved grain supplies will help lower food prices this year after sharp rises in 2011 and take the wind out of price volatility, easing inflation concerns, a senior official at the United Nations' food agency told Reuters on Monday.
Over the next decade, however, prices are set to rise for major food and agricultural commodities, Abdolreza Abbassian, senior grain analyst and economist at the UN's Food and Agriculture Organisation (FAO), said at the Reuters Food and Agriculture Summit.
Corn (Source: CME)
US corn futures end higher but slow their rally that began Friday on speculation of large imminent Chinese purchases. The USDA said private exporters sold 240,000 metric tons of U.S. corn to "unknown destinations," which traders assume is China. But more purchases will be needed to sustain corn's rally, analysts say. Corn is also supported by tight cash markets and worries the USDA has overstated U.S. corn supplies. CBOT May corn ends up 2 1/2c or 0.4% at $6.62/bushel.
Wheat (Source: CME)
US wheat futures end lower, pressured by ample global supplies and the rally in corn slowing. Concerns about greater competition in export markets from Black Sea region supplies also weigh, with Kansas City wheat shows the most weakness. May futures slid 1.2% to $6.87 1/2 a bushel while CBOT May fell 2 1/4c to $6.49 and MGEX May drops 8 1/2c to $8.11.
Rice (Source: CME)
US rice futures end lower, stabilizing after recent gains. Poor export demand and spillover weakness from wheat futures left rice futures without a supportive influence to sustain recent advances, analysts say. However, losses were limited by the need for rice prices to remain competitive with other grains as they vie for spring acreage in the Delta, analysts add. CBOT May rice ended down 1c to $14.33 1/2/hundredweight.
US corn dips after rally, soy firm on tight supply
SINGAPORE, March 13 (Reuters) - Benchmark U.S. corn futures for May eased slightly after rallying 2 percent a day earlier on expectations of Chinese purchases, while soy was firm at multi-month highs on lower supply from South America.
"More plantings are likely to boost U.S. stockpiles, which is keeping a lid on the prices," said Ker Chung Yang, analyst at Phillip Futures in Singapore.
Destructive La Nina nearly dead -Aus forecasters
SYDNEY, March 13 (Reuters) - The La Nina weather pattern blamed for heavy rains and crop destruction in the Asia-Pacific region over the past two years is coming to an end, forecasters in Australia said on Tuesday.
The Australian Bureau of Meteorology said climate models suggest the recent period of La Nina should reach a "neutral" state by around April or May, echoing the findings of forecasters in the United States.
Ottawa signals openness to foreign Viterra bid
WINNIPEG, Manitoba/ZURICH, March 12 (Reuters) - Canada has signaled it would be open to allowing a foreign bidder such as Swiss-based Glencore to take over Viterra, sending shares of the country's largest grain handler sharply higher for a second session in a row on Monday.
Glencore is one of a handful of parties eyeing a bid for Viterra , a Swiss-based industry source said on Monday. But Canada's sometimes protectionist sentiments about natural resources have left some doubting a foreign takeover bid for Viterra would get a smooth ride.
Costs multiply in Argentine port strike-grains exchange
BUENOS AIRES, March 12 (Reuters) - An 11-day-old Argentine port workers' strike has halted key grains exports and could soon start affecting other commodities shipments around the world, the Rosario grains exchange said on Monday.
Specialized crews that moor ships in Argentina have walked off the job to demand more staff be assigned to work busy docking shifts. Scores of vessels have had to drop anchor at the mouth of the country's river ways while the dispute drags on.
Ukraine sees no grain export limits in 2012/13-PM
KIEV, March 12 (Reuters) - Ukraine will not impose grain export limits in the coming season because of expectations of an "average" harvest despite drought late last year followed by sharp frosts, Prime Minister Mykola Azarov said on Monday.
Azarov told Reuters in an interview that the former Soviet republic had enough milling grain to meet all domestic needs in 2012/13.
Experts develop salt-tolerant, high-yield wheat
HONG KONG, March 12 (Reuters) - Scientists in Australia have crossed a popular, commercial variety of wheat with an ancient species, producing a hardy, high-yielding plant that is tolerant of salty soil.
The researchers, who published their work on Monday in the journal Nature Biotechnology, hope the new strain will help address food shortages in arid and semi-arid places where farmers struggle with high salinity in the soil.
Indonesian feed corn imports to fall 57 pct in 2012
JAKARTA, March 13 (Reuters) - Indonesia's animal feed industry will import 57 percent less corn this year compared to 2012 due to a surge in domestic output, the chairman of the Indonesian Feed Mill Association (GPMT) said on Tuesday.
Indonesia will import 1.5 million tonnes in 2012, compared to 3.5 million tonnes last year, Franciscus Xaverius Sudirman told Reuters.
Argentina Corn Output Likely Stable Despite Drought (Source: CME)
Argentina's 2012 corn output will likely total 21.5 million-22 million metric tons, little changed from 2011, a senior Buenos Aires-based trading executive said. The country's corn output prospects are being closely tracked worldwide as it is the world's second-biggest exporter after the U.S. Due to dry weather, farmers planted some varieties of corn later than usual this year and they have generated above-average yields, Freddy Pranteda, Cosur SA's director for grains and oilseeds, said ahead of an international grains conference here. Global commodity trading company Cosur has large exposure to South American grains. Output has jumped outside the main corn-growing region, largely offsetting declines elsewhere. Argentina produced 21.6 million tons of corn last year. Last week, the Buenos Aires Cereals Exchange said drought damage to Argentina's corn crop was 500,000 tons more than expected, and production is expected to reach just 20.8 million tons.
"Some analysts are even forecasting less than 19 million tons but such projections are too pessimistic," Pranteda said. Recent rains were beneficial to the late plantings of corn, providing moisture at a critical juncture of crop development, which revived output prospects. Output could have been higher but for the La Nina weather phenomenon, which caused a long dry spell. The dry spell was more damaging for soybeans than corn and production has declined to 46 million-46.5 million tons from 49.7 million tons in 2011, he said, adding that this may drag down exports by 29% to 7.5 million tons. Despite weather-related woes, Argentina has already sold around 5 million tons of soybeans and 7 million tons of corn from the new crop ahead of the 2012 harvest, which will gather momentum next month. At least 4.5 million tons of new-crop soybeans have been sold to China alone, Pranteda said.
Most of the soybean sales are for April-June shipment, while corn shipments are for March-May, with a small volume for June shipment. The sales were made at a wide price range, but late last week Argentina's new-crop corn and soybeans for June shipment were offered free on board at premiums of 38 cents and 65 cents to July CBOT contracts, respectively. The government initially issued licenses for exports of 7.5 million tons of corn, but if permitted, exporters will try to ship out another 3.0 million tons, Pranteda said.
Grain Prices May Fall In 2Q On Ample Supply -FAO Official (Source: CME)
Global grain prices are likely to come under downward pressure for the next few months due to a rise in output in major growing and exporting countries and ample stock levels, a senior economist said. "If weather doesn't spring any surprises, the current supply situation shows it is quite possible that prices will decline much lower than current levels," Abdolreza Abbassian, a senior economist with United Nations's Food and Agriculture Organization, said. The most active wheat, corn and soybean futures on the Chicago Board of Trade are currently trading around $6.5, $6.6 and $13.3 a bushel, respectively, much lower than the 2011 highs of $8.9325, $7.9975 and $14.55 a bushel.
Rabobank Sees Slow Corn Yield Growth, 2012 Projection Below USDA (Source: CME)
Growth in U.S. corn yields is likely to be sluggish for the next few years, as farmers' expansion into the U.S. Plains and their abandonment of typical crop rotations limits average output, Rabobank said in a report. The Netherlands-based agricultural lender projected the average 2012 U.S. corn yield at 156 bushels per acre, which would be up sharply from the 2011 yield of 147.2 but well below the USDA's most recent projection of 164 bushels per acre. Such forecasts are largely speculative at this point in the season, as the crop hasn't been planted yet and will be affected by unforeseen weather conditions. Rabobank said the range of probable average yields extends from 146 bushels per acre to 168.
Rabobank said that in the longer term, yield projections based on past trends will likely be unreliable over the next few years due to structural changes in the U.S. corn crop, as farmers in the U.S. Plains, including Kansas and the Dakotas, are planting an increasing proportion of the country's corn acreage. High corn prices have encouraged more planting in those areas, which typically yield less than farms in Iowa, Minnesota, Illinois and Indiana. "The result of such a shift in yield expectations makes the probability of lower average per-acre production more likely over at least the next five years," Rabobank said in the report. High corn prices have also prompted more farmers in the best-yielding states to plant corn in consecutive years, rather than rotating a soybean crop every two or three years, Rabobank noted. While that decision can make economic sense for farmers, agronomists say that corn yields are typically lower when the soil has been planted with corn in consecutive years.
Rabobank added that farmers may have reached their limit, at least temporarily, on how many corn plants per acre they can plant. Increased plants-per-acre have been a key driver of yield growth, the bank said. Meanwhile, seed companies have "few yield game changers" on the horizon, the bank said. The slowing yield growth means farmers will need to continue planting a large corn crop to keep up with demand, and competition for corn supplies will remain intense, Rabobank said. The USDA has projected farmers will plant 94 million acres of corn this year, the most since World War II.
China Feb cotton imports rise 234 pct on yr-industry website
BEIJING, March 13 (Reuters) - China's cotton imports in February were at 616,000 tonnes, surging 234 percent from the same period last year, an industry website showed on Tuesday.
Imports last month rose 89 percent month on month, said the report on www.cncotton.com, a website operated by the China National Cotton Reserves Corp
Ivory Coast cocoa mid crop seen below 5-year average
LONDON, March 12 (Reuters) - Ivory Coast's 2011/12 mid crop output will fall slightly below the average production over the past five years due to dry weather, which is also likely to harm quality, international exporters said on Monday.
The average forecast, based on four exporters' estimates, pegged the April-September mid crop at around 323,000 tonnes, down sharply from last year's bumper 471,735 tonnes, when ideal weather boosted output.
Vietnam revises up Feb coffee exports at 202,000 T
HANOI, March 12 (Reuters) - Vietnam exported 202,000 tonnes, or 3.37 million bags, of coffee last month, up 40.3 percent from a year earlier, Vietnam Customs said, revising up an earlier government estimate of 180,000 tonnes.
But the actual loading volume in January-February fell 12.6 percent from the same period last year to nearly 313,700 tonnes, the customs department run by the Finance Ministry said in a report seen by Reuters on Monday.
India bans fresh cotton exports - for now
NEW DELHI, March 12 (Reuters) - India will now ban fresh cotton exports and allow only quantities already registered but not shipped, its trade secretary said on Monday, as the world's No.2 producer continued to flip-flop with its trade policy, fuelling market uncertainty.
The trade minister said on Sunday the government would lift a surprise ban on cotton exports imposed on March 5, after influential Farm Minister Sharad Pawar, a coalition ally, opposed the move and asked Prime Minister Manmohan Singh to revoke the ban.
Oil Trades Near 2-Day High as Economy Lifts U.S. Demand Outlook (Source: Bloomberg)
Oil traded near the highest price in two days in New York as investors speculated fuel demand may increase amid signs the U.S. economy is strengthening. Futures were little changed after advancing 0.4 percent yesterday as Commerce Department data showed U.S. retail sales rose the most in five months in February. The Federal Reserve lifted its assessment of the economy and said most of the nation’s biggest banks passed stress tests. Crude stockpiles gained a fifth week, while inventories declined for gasoline and distillates, a category that includes diesel and heating oil, a report showed after the settlement. “I can’t see any negative bits and pieces out there at the moment that will really stop oil trading back to the top end” of a range of $104 to $110 a barrel for New York crude, said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “Inventories continue to rise and that might put a cap on prices.”
Oil for April delivery was at $106.66 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange at 11:45 a.m. Sydney time. The contract yesterday increased 37 cents to $106.71 a barrel, the highest close since March 9. Prices are 7.9 percent higher this year.
Surging U.S. oil exports cannot stay hidden forever
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, March 12 (Reuters) - America's periodic gasoline price debate is usually a mix of willful ignorance and cynicism that achieves little but oil executives must be hoping the latest episode dies down before the United States' massive fuel exports get much attention.
After all, exports of diesel fuel, and increasingly gasoline, are now crucial profit centers for many U.S. refineries, hard pressed by shrinking domestic demand.
Brent rebounds towards $126 ahead of Fed meet
SINGAPORE, March 13 (Reuters) - Brent crude rebounded towards $126 as investors awaited comments from the U.S. central bank after the outlook improved for the world's largest economy amid simmering tension between the West and Iran that could threaten oil supply.
"The FOMC could recognise that the economy has improved and this will have a positive impact on the market," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments.
Gold Extends Slump on Signs Fed Won’t Expand Stimulus (Source: Bloomberg)
Gold fell to the lowest price since January after Federal Reserve policy makers raised their assessment of the economy, signaling that monetary stimulus won’t be expanded. Gold for immediate delivery fell 1.8 percent to $1,670.15 an ounce at 3:53 p.m. New York time, after slipping as much as 2.2 percent to $1,666.13, the lowest since Jan. 25. The Federal Open Market Committee said in a statement that the labor market was improving. The dollar climbed against a basket of major currencies, eroding the investment appeal of gold. On Feb. 29, the spot price of the metal plunged 4.9 percent, the most since December 2008, after Fed Chairman Ben S. Bernanke damped speculation that the central bank would take new steps to bolster liquidity. “This is a big disappointment for gold investors who are anticipating additional stimulus,” Phil Streible, a commodity broker at RJO Futures in Chicago, said in a telephone interview after the Fed statement at 2:15 p.m. “People are still favoring the dollar.”