Wednesday, May 9, 2012

20120509 1810 FCPO EOD Daily Chart Study.

FCPO closed : 3335, changed : -16 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histogram : turned upward, seller lock in profit.
Support : 3350, 3330, 3300, 3270, 3250 level.
Resistance : 3380, 3420, 3450, 3470 level.
Comment :
FCPO closed weaker with decreased volume transacted. Soy oil price currently rebound slightly higher after overnight closed recorded loss while crude oil price trading lower.
Price trading lower as global equity market performed poorly due to Europe turmoil while traders awaits tomorrow MPOB April data and cargo surveyor export figure.
Daily chart analysis revised back to recommending a downside biased market development possibly testing previous low support level.
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.

20120509 1737 FKLI EOD Daily Chart Study.

FKLI closed : 1578 changed : -7.5 points, volume : lower.
Bollinger band reading : side way range bound little downside biased.
MACD Histogram : resume falling, seller still in.
Support : 1570, 1565, 1550, 1540 level.
Resistance : 1580, 1590, 1595, 1600 level.
Comment :
FKLI closed fall lower with drying out volume transacted doing about 7 points discount compare to cash market that also closed lower. Overnight U.S. markets closed recorded loss and today Asia markets ended in negative territory while European markets continue to trade lower.
Worries on getting tension Greece political development will further worsen Europe debt crisis pressured global markets to trade lower.
Daily chart study adjusted to calling a side way range bound little downside biased market development after market failed to stay above middle Bollinger band level.
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.

20120509 1716 Regional Markets EOD Daily Chart Study.

DJIA chart reading : side way range bound.
 Hang Seng chart reading : side way range bound.
KLCI chart reading :  correction range bound little downside biased.

20120509 1613 Global Market & Commodities Related News.

Shares, gold and oil fell and the euro remained pressured as Greece struggled to form a government two days after an election, heightening the risk that a hard-won bailout deal could be scrapped. U.S. stocks ended lower on Tuesday after political developments in Greece fanned concerns about Europe's fiscal health, but a late rally helped indexes cut losses to close well above  lows.

The euro fell close to a recent three-month low, on worries that political uncertainty in Greece and a French leadership change may undermine austerity plans key to tackling the euro zone's debt crisis.

FOREX-Euro falls as political risks weigh, nears 3-mth low
SINGAPORE, May 9 (Reuters) - The euro fell close to a recent three-month low on Wednesday, on worries that political uncertainty in Greece and a French leadership change may undermine austerity plans key to tackling the euro zone's debt crisis.
"One issue is whether this will cause investors to shun risk globally, or be viewed as the euro's problem alone and just lead to weakness in the euro," said Koji Fukaya, director of global foreign exchange research for Credit Suisse Securities in Tokyo.

U.S. soybeans fell for a third consecutive session, while corn and wheat ticked lower, amid a broad-based weakness in financial markets which was triggered by escalating fears about Greece's political crisis.

Australia says wheat exports drop 13 pct in March
Australian wheat exports fell 13 percent in March from February, when exports hit a nine-year high, government data showed on Wednesday.

Indonesia sees 2012 processed cocoa bean exports at 380,000 T
Indonesia estimates that exports of processed cocoa beans this year will total 380,000 tonnes, up from 249,188 tonnes in 2011, Sindra Wijaya, executive director of the Indonesian Cocoa Industry Association (AIKI) said on Wednesday.

Colombia coffee output up for first time in a year
Colombia's coffee production rose 11 percent in April versus the same month last year, after 12 months of declines due to heavy rains that had battered coffee crops, the growers federation said on Tuesday.

Argentine grains port workers threaten pay strike
Workers at leading grains export ports in Argentina will go on strike on Thursday and blockade soy-crushing plants unless their minimum wage is hiked to reflect brisk inflation, a union spokesman said on Tuesday.

Brent crude slipped towards $112, maintaining its downtrend for a sixth session, as political uncertainty in the debt-laden euro zone and rising oil stocks in the United States revived worries about fuel demand.

US crude stocks seen rising, Cushing stocks up
U.S. crude oil stockpiles were expected to have increased for a seventh straight week last week as inventories in Cushing, Oklahoma continued to build ahead of the Seaway pipeline reversal, an extended Reuters poll showed on Tuesday.  

Brazil oil output falls in March for second month
Brazilian output of oil and natural gas fell 5 percent in March from February, the second straight month-on-month decline and the lowest monthly average in seven months, Brazil's oil regulator, the ANP, said in a statement.

India's April Iran oil imports plunge 34 pct vs March-trade
India's crude oil imports from Iran declined by about 34 percent in April compared with March, deeper than expected and the first evidence of New Delhi implementing cuts in supplies from the sanctions-hit nation under annual deals that began last month.

Promising start for China iron ore trading platform
An Australian cargo was among three sold via China's first physical iron ore platform on Tuesday, a promising start for the electronic trading system, although traders say volumes must rise before the platform can create price benchmarks.  

US aluminum premiums soar to record above 10 cts/lb
Benchmark U.S. Midwest spot aluminum premiums rose above 10 cents a lb for the first time as a persistently strong spread between cash and forward prices on the London Metal Exchange continued to tie up the metal in the warehouses.

London copper futures fell, extending losses after hitting two-week lows near $8,000 a tonne in the previous session, weighed down by worries about the impact of political turmoil in Greece and the euro zone debt crisis.  

Gold dropped to a four-month low, pressured by a weaker euro as investors fretted about the political upheavals in Greece that threaten to sink the country into chaos and endanger the euro zone's efforts to end the debt crisis.

METALS-Copper rebounds off $8,000; capped by Europe worries
SHANGHAI, May 9 (Reuters) - London copper futures fell on Wednesday, extending losses after hitting two-week lows near $8,000 a tonne in the previous session, weighed down by worries about the impact of political turmoil in Greece and the euro zone debt crisis.
"The Greek and French elections added a bearish tone to the day as the new leaderships present a threat to the euro zone's unity in managing its debt crisis," said a Qingdao-based trader.

PRECIOUS-Gold dips to 4-month low on Greece uncertainty
SINGAPORE, May 9 (Reuters) - Gold dropped to a four-month low on Wednesday, pressured by a weaker euro as investors fretted about the political upheavals in Greece that threaten to sink the country into chaos and endanger the euro zone's efforts to end the debt crisis.
"The situation is Europe is difficult, but what's happening is that anything that's slightly tainted with risk is being sold, even though the real risk associated with that product is less than one could justify by its price movements," said Nick Trevethan, senior metals strategist at ANZ in Singapore.

20120509 1107 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets retreat on Greece bailout uncertainty
TOKYO, May 9 (Reuters) - Asian shares fell and the euro stayed pressured on Wednesday, as Greece struggled to form a government two days after elections, raising the risk that a hard-won bailout could be nullified.  
"The market as a whole will be in risk-aversion mode due to the problems in Greece," said Masayuki Doshida, a senior market analyst at Rakuten Securities, about the Nikkei.    

COMMODITIES-Down again on Europe fears; oil, metals sink
NEW YORK, May 8 (Reuters) - Commodities fell across the board o n T uesday, with oil notching its biggest five-day loss since October and copper posting its biggest slide in a month as post-election worries in Greece and France sparked broad risk aversion across financial markets.
"As Europe's political, financial and social cohesion crumbles, it will have the attendant effect on demand" for commodities, said Michael Fitzpatrick, editor of industry newsletter Energy Overview in New York.

Brazil oil output falls in March for second month
RIO DE JANEIRO, May 8 (Reuters) - Brazilian output of oil and natural gas fell 5 percent in March from February, the second straight month-on-month decline and the lowest monthly average in seven months, Brazil's oil regulator, the ANP, said in a statement.
Declines came as state-led oil company Petrobras  shut platforms for maintenance and Chevron and its partners stopped output in the Frade field to explore the source of oil leaks.

US trims natgas output growth view, lifts demand
NEW YORK, May 8 (Reuters) - The U.S. Energy Information Administration o n T uesday trimmed its estimate for domestic natural gas production growth in 2012, but sharply raised its expectation for demand gains this year.
In its May Short-Term Energy Outlook, the EIA said it expected marketed natural gas production in 2012 to rise by 2.9 billion cubic feet per day, or 4.4 percent, to 69.14 bcfd, still a record high but slightly below its April outlook that had output this year at 69.22 bcfd.

Reliance cuts India gas reserves less than expected
MUMBAI, May 8 (Reuters) - India's Reliance Industries  cut estimates for proven gas reserves in its I ndian blocks by 7 percent to 3.67 trillion cubic feet (tcf), less than the market had speculated on the basis of reports from the company's partners and newspapers.
The figures, released by Reliance in its 2011/12 annual report on Tuesday, could ease concerns over the size of the reserves.

Bangladesh to raise fuel price again-FinMin
DHAKA, May 8 (Reuters) - Bangladesh plans to raise fuel prices for a fourth time in a year to reduce the subsidy burden on the government and to limit losses of the state oil corporation, Finance Minister Abul Maal Abdul Muhith told Reuters on Tuesday.
Bangladesh needs to increase fuel prices to reduce losses incurred by the state-run Bangladesh Petroleum Corporation (BPC), to adjust the home rate with prices in the international market," he said in an interview.

India's April Iran oil imports plunge 34 pct vs March-trade
NEW DELHI, May 8 (Reuters) - India's crude oil imports from Iran declined by about 34 percent in April compared with March, deeper than expected and the first evidence of New Delhi implementing cuts in supplies from the sanctions-hit nation under annual deals that began last month.
State-run buyers are at the forefront of reductions, leaving privately-owned Essar the biggest Indian client of Iran, tanker discharge data showed, just as the U.S. praised steps taken by India's refiners to back Washington's pressure on Tehran.

OIL-Oil slips as Europe, Greece fan demand worries
NEW YORK, May 8 (Reuters) - Oil prices fell on Tuesday for a fifth day running as Greece's post-election uncertainty added to signs of economic slowdown on both sides of the Atlantic and fanned concerns about anemic demand for petroleum as supply increases.
"Failure to take out Monday's lows caused the shorts that had piled in the market to turn," said Gene McGillian, analyst, Tradition Energy in Stamford, Connecticut.

NATURAL GAS-US natgas futures reverse, end up on late buying binge
NEW YORK, May 8 (Reuters) - U.S. natural gas futures reversed course and ended higher o n T uesday, driven by a late flurry of buying amid signs the market may be tightening despite early weakness as moderate weather this week slowed demand.
"People are expecting another bullish weekly inventory report on Thursday, and there was also talk of some late fund buying. The market is slowly turning around and moving out of the downtrend," Energy Management Institute's Dominick Chirichella told Reuters.

EURO COAL-Fresh lows draw out trader buying
LONDON, May 8 (Reuters) - European and South African coal prices dipped by around $1.00 to fresh lows on Tuesday, a move which drew out buying by traders rather than end-users.
"There is clearly now upside room for coal demand in Europe but if dark spreads (profit for generating using coal) weren't so in the money against sparks (profit for generating from gas) we could have seen an even worse picture for coal than the one we're currently experiencing," said Marcus Garvey, analyst with Credit Suisse.

20120509 0950 Global Economy Related News.

Bank Negara Malaysia's (BNM) international reserves amounted to RM416.9bn (US$135.9bn) as at 30 Apr, up slightly from RM416.6bn (US$135.8bn) as at 13 Apr. The reserves position was sufficient to finance 9.5 months of retained imports and was four times the short-term external debt. (BNM)

Bank Negara Malaysia's (BNM) inflation forecast of 2-3% still remains despite the introduction of the minimum wage, which represented a small part of production cost and would not contribute to higher prices particularly when the country was in a period of moderating prices, said Governor Tan Sri Dr Zeti Akhtar Aziz. The minimum wage was positive, as it would contribute to an increase in consumption as the group it catered to have a high propensity to consume, she said. "We have already priced in the prospect of the minimum wage,” she added. Asked on the impact of European banks deleveraging in Asia, she said most countries in Asia would be affected but to a "limited extent" because there was ample liquidity in the region. “Our financial sector can step in, not only banks but also the financial markets which are more developed, to provide the liquidity," she said. (Bernama, BT)

Malaysia's national debt at the end of last year stood at RM257.2bn or 30.2% of GDP, the Dewan Negara was told yesterday. Deputy Finance Minister Datuk Donald Lim Siang Chai said the national debt or external debt was debt borne by the country following loans obtained by the government and private sector from overseas sources. The Federal Government's total debt was RM456.1bn or 53.5% of GDP in 2011 with RM438bn or 96% was domestic debt while the balance RM18.1bn or 4% was external debt. (Bernama)

The Senate Tuesday passed the Income Tax (Amendment) Bill 2012, Financial Reporting (Amendment) Bill 2012 and Labuan Companies (Amendment) Bill 2012. The Income Tax (Amendment) Bill 2012 seeks to allow taxpayers to claim for deductions for donations for religious purposes and also allow a taxpayer to claim for deductions for contributions to the construction, improvement or maintenance of a public building for religious purposes. The Financial Reporting (Amendment) Bill 2012 seeks to enable the Financial Reporting Foundation to oversee the functions of the Malaysian Accounting Standards Board and to allow the Securities Commission and Bank Negara to modify accounting standards to ensure financial stability. The amendment of the Labuan Companies (Amendment) Bill 2012 would become a catalyst for foreign investment in Labuan. (Bernama)

The Senate on Monday passed the Supplementary Supply Bill (2011) 2012, the Construction Industry Payment and Adjudication Bill 2011 and the Mediation Bill 2012. The Supplementary Supply Bill (2011) 2012 provides an additional supply of RM10.29bn to several ministries and departments for the provision of services. The Construction Industry Payment and Adjudication Bill 2011 is aimed at facilitating payment, solving disputes through adjudication and providing a remedy to expedite payment in the construction industry. The Mediation Bill 2012 is aimed at enhancing mediation as an alternative to resolve disputes in a fair, speedy and cost effective manner. (Bernama)

The government is confident of achieving the target of 30% Bumiputera equity ownership by 2020 despite the current global economic uncertainty, said Minister in the Prime Minister's Department, Tan Sri Nor Mohamed Yakcop. The confidence is based on growing demand for Malaysian products in China and India, as well as on the government's economic transformation programmes and policy, he said. (Bernama)

There is a need to raise gas and electricity tariffs but it is for Cabinet to decide, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said. The six-month interval of tariff revision for gas and electricity has not changed. The policy was not scrapped. The ultimate decision on whether or not to raise the tariffs lies with the Cabinet, he said. “Right now, gas supply to the power-generation sector is priced at RM13.70/mmBTUm while the international market price is around RM40/mmBTU, he added. The last price hike in gas and electricity was on 1 Jun 2011 with natural gas price sold to the power sector was raised 28% to RM13.70/mmBTU from RM10.70/mmBTU. The average electricity tariff went up 2.23 sen/kWh, or 7%, to 33.54 sen/kWh. (BT)

The financial industry in Asia is well-positioned to benefit from continued favourable growth prospects, supported by productive economic activity, strong regulatory and supervisory systems, financial inclusion agenda and broader mandate by central banks and regulatory authorities. Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said new initiatives are being pursued to enhance surveillance with crisis management tools in place to enable swift responses to emerging risks and vulnerabilities in the financial system, including those within the traditionally unregulated segments of the system. Authorities in Asia are also continuing to refine and sharpen the efficacy of 'macroprudential' instruments to manage excesses and imbalances in the financial system. Asia already has considerable experience with these instruments during periods of escalating asset prices and excessive financial market volatility, she said. (The Sun)

Thailand prices of consumer products are high because of seasonal factors, Commerce Minister Boonsong Teriyapirom said. The government will maintain contributions to energy funds, including those for petrol, gasohol and diesel fuel. It has also agreed to delay MRT fare adjustments, which are due to rise on 3 Jul. (Bangkok Post, The Nation)

The downturn in the HSBC purchasing managers index for Vietnam in Apr 2012 slowed down to 49.5 points, as manufacturing output decreased while export turnover improved. (Shanghai Daily)

Indonesia: Worst rupiah start since 2005 pressures Indonesia to undo easing
Indonesia’s central bank will probably consider steps to curb excess funds in the economy and extend a pause in interest-rate cuts as the second-worst performing currency in Asia highlights the threat from inflation. Bank Indonesia will keep the reference rate at 5.75% tomorrow, according to all 21 economists surveyed by Bloomberg News. The central bank has left its benchmark unchanged since an unexpected reduction in February. (Bloomberg)

Australia: Trade deficit widest since October 2009
Australia’s trade deficit widened in March to the biggest in almost 2 1/2 years as a 5% rise in imports outpaced export growth in an economy driven by the mining industry. Imports outpaced exports by AUD1.587bn (USD1.6bn), from a revised AUD754m deficit in February, the Bureau of Statistics said. The gap was the widest since a AUD1.595bn shortfall in October 2009 and exceeded the AUD1.3bn median estimate in a Bloomberg News survey of 20 economists. (Bloomberg)

Germany: Industrial output rose three times more than forecast
German industrial output rose more than three times as much as economists forecast in March, adding to signs Europe’s largest economy may have avoided recession. Production jumped 2.8% from February, when it dropped 0.3%, the Economy Ministry said. February output was revised up from a 1.3% decline. Economists forecast a March gain of 0.8%, the median of 38 estimates in a Bloomberg News survey shows. In the year, production advanced 1.6% when adjusted for working days. (Bloomberg)

Confidence among small businesses climbed as the National Federation of Independent Business’ optimism index rose to 94.5, the highest since Feb 2011, from 92.5 the previous month. (Bloomberg)

According to a survey by the Institute for Supply Management, purchasing managers at US factories said they anticipate sales will grow 4.5% this year, less than a 5.5% Dec prediction. (Bloomberg)

US: Factories in US grew less optimistic about sales, ISM says
Manufacturers in the US became less-optimistic about 2012 sales growth than at the end of last year, while service companies grew more upbeat, according to a survey by the Institute for Supply Management. Purchasing managers at US factories said they anticipate sales will grow 4.5% this year, less than a 5.5% December prediction, according to the Tempe, Arizona-based group’s semi-annual forecast issued. By contrast, service providers estimated revenue will climb 4.8% this year, up from the 3.1% forecast in December. (Bloomberg)

US: Job openings rise to highest level since 2008
Employers in the US were seeking to fill more jobs in March than at any time in almost four years, showing growing confidence in the US economy. The number of open positions increased by 172,000 to 3.74m, the most since July 2008, from a revised 3.57m the prior month that was larger than previously estimated, the Labor Department said. (Bloomberg)

20120509 0950 Malaysia Corporate Related News.

Najib declares windfall for palm oil planters as general election looms
PM Datuk Seri Mohd Najib Razak announced windfall one-off payments to palm oil planters and their family yesterday, the latest in a string of giveaways ahead of an upcoming general election. The Federal Land Development Authority will distribute RM1.7bn to more than 112k members of its planters’ cooperative, as well as their wives and children. The government has already raised civil servants’ salaries, announced plans for a national minimum wage, and begun distributing RM500 cash handouts to the poor. (Malaysian Reserve)

CIMB Group buys BoC stake in the Philippines for RM881m
CIMB Group Holdings will pay RM881m or RM13.13/share for a 59.98% stake in Bank of Commerce (BoC) in the Philippines and thus extends its footprint further into the Asean banking sector. Its group CEO Datuk Seri Nazir Razak said the purchase value of 1.14x price to book and at a premium of about RM110m was reasonable but warned that the multiple could rise to 1.3x upon alignment with CIMB’s accounting and provisional policies. (Malaysian Reserve)

Kencana Petroleum awarded RM474m Sarawak job
Kencana Petroleum’s wholly-owned subsidiary, Kencana HL SB, has received a letter of award from Murphy Sarawak Oil Co Ltd for the fabrication of offshore topsides. The job is estimated at between RM460m and RM474m. It was given the award on 20 Apr and is expected to deliver the job from 1QFY13 to 2QFY13. (Malaysian Reserve)

Perisai Petroleum buys USD208m rig from PPL Shipyard
Perisai Petroleum Teknologi has announced its entry into the offshore drilling segment by ordering a USD208m (RM635m) rig from SembCorp Marine Ltd subsidiary, PPL Shipyard, to construct a jack-up rig, with an option for a second rig at a later date. The first Pacific Class 400 jack-up drilling rig is expected to be completed and delivered by end-July 2014, while the second unit of similar specification is set for delivery in 2Q15. (Financial Daily)

MMC to relist Malakoff next year
MMC Corp is expected to relist its 51% owned unit Malakoff Corp next year, a move which could involve an offer for sale by MMC of its shares in Malakoff, besides a new share sale in the power generation subsidiary. Group MD Datuk Hasni Harun said the planned relisting could see MMC offering to sell at least a quarter of its 51% block in Malakoff. This could mean MMC lowering its interest to 38.25%, thus reducing Malakoff to an associate company. (Financial Daily)

The identities of Felda Global Ventures Holdings Bhd’s (FGVH) strategic foreign partner or partners will be announced next week. FGVH group president and chief executive officer Datuk Sabri Ahmad said the foreign partner or partners will assist in the areas that Felda does not have strong presence in, such as logistics, marketing, advertising and promotions. “Felda is strong in upstream operations but needs strong foreign strategic partners in downstream operations. We will announce who they are next week,” said Sabri. Sources had said FGVH had shortlisted four foreign strategic partners. Among those speculated to be in the running are Procter & Gamble and Behn Meyer & Co, which are already listed as joint venture partners of FGVH, and New York based Bunge Ltd and Archer Daniels Midlands Co. The purpose of the strategic partner is to grow the business across the value chain from being too reliant on upstream to mid-stream and downstream. (BT)

CIMB Group CEO Datuk Seri Nazir Razak is disappointed with the decision to unwind the share-swap deal between Malaysian Airlines (MAS) and AirAsia, saying it had succeeded in establishing better cooperation between the two airlines. “It has laid the foundation for a stronger collaboration framework between the two companies and I don‟t think that could have been done without this period of cross-holding, rather ironically. We hope that the new framework gives rise to good cost savings for both MAS and AirAsia and is helpful to MAS‟s turnaround plan,” he added. (The Sun)

AirAsia has received Singapore‟s approval to start a hub in the island republic soon, say sources, allowing the airline to expand its network. Singapore has informed AirAsia it will get an air operator‟s certificate (AOC) as soon as possible, ending years of lobbying by Asia‟s biggest low-cost carrier to set up operations in the city-state. AirAsia chief executive Tan Sri Tony Fernandes was quoted last February as saying he aims to get clearance this year from the Singapore aviation authorities to fly to more destinations from Singapore. Fernandes told Channel NewsAsia he proposed to make the country a regional hub for his low-cost airline, alongside Malaysia, Indonesia, the Philippines and Japan, naming India and China as key countries to which AirAsia is seeking approval to fly to. “This is a good boost for AirAsia as the current economic climate means more people will fly low-cost airlines for leisure and even business from Changi, which is an international hub,” another source said, adding AirAsia can compete with Singapore Airlines’ budget carrier unit Scoot. (Malaysian Insider)

AirAsia X (AAX) has registered another record-breaking quarterly load factor of 87% for 1Q12, an increase of six percentage points from the same quarter last year. AAX carried 690,000 passengers, a growth of 7.5% yoy. CEO Azran Osman-Rani said the airline‟s core markets remain Australia, Greater China and North Asia as they continue to deliver strong passenger growth. (Bernama)

Troubles at Malaysian Airlines (MAS) are deepening. Skytrax has placed the company‟s vaunted five-star airline ranking on watch following consistently poor feedback from passengers. Recent customer reviews have depicted the airline as „uncomfortable‟ while its service „lacked warmth‟. There were also complaints about the airline‟s fleet being „poorly maintained‟. Skytrax‟s review facility also has customers making unfavourable comparisons between MAS and Garuda Indonesia and Singapore Airlines. (Financial Daily)

PPB Group has announced the receipt of two more approvals from the Chinese government on its proposed 20% stake purchase in Wilmar International Ltd's China flour milling units. To date, four of the seven selected China subsidiaries have received relevant regulatory authorities' approval. (Financial Daily)

Telekom Malaysia Bhd is still reviewing the documents on the request for proposal (RFP) in respect of digital terrestrial television broadcasting (DTTB), its Group Chief Executive Officer, Datuk Zamzamzairani Mohd Isa said Tuesday. He said the proposed bid would cover a very wide scope and not only backhaul services, which the company is currently providing to broadcasters. The RFP is for the building of infrastructure to migrate free-to-air television stations from analogue to digital by 2015. The deadline for the submission of proposals is July 24, 2012. (Bernama)

DiGi expects revenue contribution from its mobile data segment to reach 35% this year from 30% last year even as this segment continues to enjoy growth as opposed to the relatively saturated voice segment. Its CEO Henrik Clausen said DiGi aims to grow its revenue from mid to high single digit this year. It is expected to deliver a growth “much more” than the overall industry's projection of 5% helped by a growth in subscribers and an uptake in its data services, Clausen said. Clausen said DiGi expected to turn in an EBITDA margin similar to last year's, which stood at 46.4%. DiGi has set aside up to RM750m for capex in 2012. (StarBiz)

BIMB Holdings unlisted unit Bank Islam Malaysia is still in preliminary discussions with PT Bank Muamalat Indonesia to acquire a stake in the latter. Due to the regulatory uncertainty in Indonesia, BIMB MD Johan Abdullah said that the group is also engaging with the Indonesian authorities before it makes any decision to invest in the republic‟s capital market. BIMB already has a presence in Indonesia through its 65.22%-owned Syarikat Takaful Malaysia Bhd (STMB). STMB controls 56% of PT Syarikat Takaful Indonesia, which in turn holds majority stakes in PT Asuransi Takaful Keluarga and PT Asuransi Takaful Umum. According to Johan, Takaful Malaysia is looking to consolidate and restructure its shareholdings in Takaful Keluarga and Takaful Umum under one umbrella company, and create a more efficient corporate structure. (Financial Daily)

Permanis Sdn Bhd recently signed an exclusive multi-million dollar agreement to supply beverages to Revenue Valley Sdn Bhd, which owns and operates food outlets, Manhattan Fish Market (MFM), Tony Roma‟s and Popeyes. The five-year deal sees Permanis, the official bottler for PepsiCo in Malaysia, supplying Pepsi, 7Up, Mirinda, Mountain Dew, Lipton, Revive, Tropicana Twister and Bleu mineral water to all 18 MFMs, six Tony Roma‟s and five Popeyes outlets in the country. "This is a huge milestone for us in many ways," said Permanis CEO, Erwin Selvarajah. "These outlets are some of the best-known food names in Malaysia and the United States and synonymous with high-quality meals. We‟re delighted that Revenue Valley has selected Permanis to be their beverage partner of choice," he added. He also said that in addition to Revenue Valley, Permanis would look to forge other innovative business partnerships in the future, to introduce its world-class products to a wider consumer base. (Bernama)

Suria Capital's venture into property and development is now taking shape after securing 9.4ha here for a landmark project. The group aims to have a mixed development there to complement Yayasan Sabah's proposed Sabah International Convention Centre (SICC) nearby. Suria group chairman Tan Sri Ibrahim Menudin said it now has the land title after paying half of the RM142m land premium. He said the project will involve a gross development value of RM1.8bn, with construction spanning five to eight years. "The mixed development will include two hotels where we are looking at 800 to 1,000 rooms, plus commercial, retail and residential lots," he added. (BT)

Eleven Malaysian companies have bidded for the construction job for the interim port facilities of the new Samalaju Port in Bintulu. Tender for the package, the second for the port project called by Bintulu Port Holdings Bhd (BPHB) closed last Wednesday. The package is worth about RM200m with various works to be completed between nine and 12 months. It is understood that BPHB targets to award the contract for the interim port facility package later this month. BPHB CEO Datuk Mior Ahmad Baiti Lub said the interim facilities would include a 300m barge berth with a depth of 7m. Based on its masterplan, BPHB targets to commence the construction of the port on 450ha early next year for full completion in 2016. (Star Biz)

20120509 0947 Global Market Related News.

Stocks, Commodities Fall as Euro Extends Slump on Greece (Source: Bloomberg)
Stocks and commodities slid, while the euro extended its longest slump since 2008, as concern that new Greek political leaders will back out of bailout agreements sent the nation’s benchmark equity index to an almost 20-year low. The Standard & Poor’s 500 Index slipped 0.4 percent to close at 1,363.72 at 4 p.m. in New York. The index pared a loss of as much as 1.6 percent after holding for most of the day above 1,350, a technical level watched by traders. Greece’s ASE index plunged 3.6 percent to close at the lowest level since November 1992. Copper and oil lost at least 1 percent as the S&P GSCI Index of commodities wiped out most of its 2012 gain. The euro fell a seventh day, losing 0.3 percent to $1.3013. Ten-year Treasury yields fell to a three-month low.
Speculation that Greece’s new government will reject terms of its financial rescue grew as New Democracy leader Antonis Samaras said he failed to form a coalition following the weekend elections, passing the opportunity to Alexis Tsipras’s Syriza party. Tsipras said he plans to form a government of left-wing parties that would nationalize banks, repeal recent labor reforms and cancel the bailout accords. “The situation in Europe could get worse before it gets better,” said James McDonald, chief investment strategist at Northern Trust Corp. in Chicago. His firm manages $715 billion. “The concern is about the potential that Greece does not carry through on their agreements and they default and leave the euro. While investors have known Greece is going to be challenged to handle their debt load, it’s another thing to watch unfold.”

Asian Stocks Fall to Three-Month Low on Europe Turmoil (Source: Bloomberg)
Asian stocks dropped, with the region’s benchmark index heading for its lowest close in three months, as political tension in Greece fueled concern Europe’s debt crisis may worsen, weakening the outlook for exporters. Samsung Electronics Co. (005930), which depends on Europe for 19 percent of sales, declined 1.1 percent in Seoul. Namco Bandai Holdings Inc. sank 5 percent in Tokyo after the operator of arcades and theme parks forecast a drop in profit. Woodside Petroleum Ltd., Australia’s second-largest oil producer, slid 1.4 percent as crude oil futures traded near a three-month low. “Europe remains the biggest issue facing markets,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. “It’s not clear how deep the downturn is going to be and the effect this is going to have elsewhere.”
The MSCI Asia Pacific Index (MXAP) slipped 0.5 percent to 120.78 as of 9:33 a.m. in Tokyo, heading for its lowest close since Jan. 24. More than four shares fell for each that rose on the gauge. The measure slumped 2.3 percent on May 7, the biggest decline since November 10, amid concern Europe’s debt crisis may worsen and threaten the global economic recovery after Francois Hollande was elected France’s first Socialist president in almost two decades.

Japan Stocks Drop as Greece Fuels Euro Exit Concerns (Source: Bloomberg)
May 9 (Bloomberg) -- Japanese stocks fell, with the Topix Index falling to a three-month low, as political tension fueled concern that debt-stricken Greece will be the first nation to exit the euro, dimming the earnings outlook for exporters. Mitsubishi Motors Corp. (7211), an automaker that gets 27 percent of its sales from Europe, dropped 2.3 percent. Namco Bandai Holdings Inc., an operator of arcades and theme parks, fell 5.7 percent after it forecast a drop in full-year profit. Seasonings maker Ajinomoto Co. jumped 7.5 percent after announcing a plan to buy back shares. The Topix declined 0.8 percent to 770.77 as of 9:19 a.m. in Tokyo, set for the lowest close since Feb. 6. The Nikkei 225 Stock Average (NKY) dropped 0.9 percent to 9,101.91 as of 9:20 a.m., with about 13 stocks sliding for each that advanced.
“Europe remains the biggest issue facing markets that we need to have clarity on,” said Andrew Pease, Sydney-based chief Asia-Pacific investment strategist at Russell Investment Group, which manages about $150 billion. “It’s not clear how deep the downturn is going to be and the effect this is going to have elsewhere.”

S&P 500 Declines to Lowest Level in One Month on Greece (Source: Bloomberg)
U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the lowest level in almost a month, as political tension in Greece intensified concern about a euro exit and a deepening of the region’s debt crisis. Equities trimmed earlier losses after the S&P 500 dropped below 1,350, a so-called support level being watched by traders. Hewlett-Packard (HPQ) Co. and Bank of America Corp. fell at least 2.1 percent to pace declines among the biggest companies. McDonald’s Corp., the world’s largest restaurant chain, slumped 2.1 percent as April sales trailed projections. Fossil Inc. (FOSL) plunged 38 percent, the most since 1995, after the owner of the namesake watch brand reduced its full-year earnings forecast. The S&P 500 slid 0.4 percent to 1,363.72 at 4 p.m. New York time, trimming a loss of as much as 1.6 percent. The Dow Jones Industrial Average fell 76.44 points, or 0.6 percent, to 12,932.09 for a fifth day of losses.
Greek stocks sank to a two- decade low. About 7.8 billion shares changed hands on U.S.  exchanges, or 17 percent above the three-month average. “It’s the unknown in Europe affecting the market,” said Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania. His firm manages about $6.5 billion. “If Greece does exit the euro, will there be contagion? It could have a negative reverberation throughout the globe.”

European Stocks Retreat Amid Greece Government Concern (Source: Bloomberg)
European stocks dropped after the leader of Greece’s biggest political party failed to reach an agreement on a new government following the weekend’s elections. National Bank of Greece SA led a selloff in banks, falling 8.4 percent. Spain’s Bankia SA (BKIA) dropped 4.8 percent. Taylor Wimpey Plc (TW/) led U.K. builders lower after a gauge of house prices fell to a six-month low. Royal KPN NV surged 17 percent after America Movil SAB offered 2.6 billion euros ($3.4 billion) for a larger stake in the business. The Stoxx Europe 600 Index (SXXP) slid 1.7 percent to 250.58 at the close in London as the cost of insuring against default on European sovereign and corporate debt advanced. The Stoxx 600 has fallen 8 percent from this year’s high on March 16, paring the gauge’s advance in 2012 to 2.5 percent. The U.K. and Irish markets were closed for a holiday yesterday.
“European political risk remains center stage for financial markets,” wrote Adrian Cattley, a strategist at Citigroup Inc. in a report to clients dated yesterday. Greece’s election result “suggests no quick path to a new stable government and could raise probability of contagion risks.”

FOREX-Political uncertainty leaves euro vulnerable
LONDON, May 8 (Reuters) - The euro fell on Tuesday and was vulnerable to more losses on worries that political uncertainty in Greece and a change of French president could threaten austerity plans seen as key to tackling the euro zone debt crisis.  
"The market will be in a wait and see mode and consolidating around $1.30 until we get new indications as to what direction Europe goes from here," said Audrey Childe-Freeman, global head of currency strategy at JP Morgan Private Bank.

Euro Stays Lower as Greece Remains Without a Coalition (Source: Bloomberg)
The euro remained lower, extending its longest losing streak in 3 1/2 years as Greece’s politicians struggle to form a new government, raising concern that the nation may leave the currency bloc. The 17-nation euro traded 0.5 percent from an almost three- month low versus the yen before Alexis Tsipras of Greece’s Syriza party is due to meet today with leaders of New Democracy and Pasok, the two Greek parties that supported austerity measures. Demand for so-called haven currencies, such as the dollar and yen, was buoyed as Asian stocks extended a global slump in shares before data forecast to show a decline in German exports and a gain in U.S. jobless claims. “If Greece exits the euro bloc, it will be their own decision, which may come if we see the change of leaders there,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest-rate risk-management company. “Euro is going to be under pressure for some time.”
The euro slid 0.1 percent to $1.2992 as of 9:55 a.m. in Tokyo from yesterday, after touching $1.2955 on May 7, the weakest level since Jan. 25. The seven-day slump through yesterday was the longest stretch of declines since September 2008. The common currency lost 0.1 percent to 103.77 yen, after falling to 103.24 on May 7, the lowest since Feb. 16. Japan’s currency bought 79.88 per dollar from 79.87.

Korean Won Climbs, Bonds Fall on IMF Forecast, Spain (Source: Bloomberg)
South Korea’s won fell to a two-week low and government bonds rose as Greek politicians struggled to form a new government after elections, damping investor appetite for riskier assets. Alexis Tsipras, whose Syriza party placed second in Greek elections on May 6, said he would form a coalition government of left-wing parties that reject austerity measures needed to secure a European Union-led bailout. The Kospi Index (KOSPI) declined as overseas investors sold more Korean shares than they bought for a sixth day. The Bank of Korea will probably leave its benchmark interest rate at 3.25 percent after a policy review tomorrow, according to all 17 economists in a Bloomberg News survey. “Greece’s political struggle is the main issue in the market today, but declines in the won will be limited with exporters waiting to sell the dollar once the won weakens,” said Lee Yong Hee, a Seoul-based currency dealer at Industrial Bank of Korea.
The won dropped 0.4 percent to 1,139.73 per dollar as of 9:41 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,139.89, the weakest level since April 25. One-month implied volatility for the won, a measure of exchange-rate swings used to price options, gained eight basis points, or 0.08 percentage point, to 7.60 percent.

Australian Dollar Weakens on Greece; Yields Drop to Record Low (Source: Bloomberg)
Australia’s dollar weakened and bond yields fell to a record as concern mounted that Greek leaders will be unable to form a coalition government, reducing appetite for riskier assets. The Australian currency slid against all major peers as bets increased that a left-leaning coalition in Greece may undo bailout accords. The so-called Aussie is 0.1 percent from this year’s low versus the dollar after the Australian budget indicated an end to four years of deficits. New Zealand’s currency held its longest stretch of declines in more than six years against the dollar on prospects Asian stocks will extend a global rout. “Risk is going to be on the backfoot while the Greek squabbles continue,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia. (CBA) “I don’t have a lot of optimism that these things will be resolved quickly. It’s pulling down many currencies like the Aussie, the kiwi and the Canadian dollar, which are more linked to global growth.”
The Australian dollar fell 0.2 percent to $1.0100 as of 9:01 a.m. in Sydney after touching $1.0089 yesterday in New York, the lowest level since Dec. 29. It lost 0.2 percent to 80.66 yen. New Zealand’s currency was little changed at 78.67 U.S. cents after dropping 0.9 percent to 78.78 cents yesterday. It completed a seven-day decline yesterday, the longest losing streak since November 2005. The kiwi was at 62.83 yen from 62.92.

Job Openings in U.S. Rise to Highest Level Since 2008 (Source: Bloomberg)
Employers in the U.S. were seeking to fill more jobs in March than at any time in almost four years, showing growing confidence in the U.S. economy. The number of open positions increased by 172,000 to 3.74 million, the most since July 2008, from a revised 3.57 million the prior month that was larger than previously estimated, the Labor Department said today in Washington. Another report showed small companies were more optimistic on their outlook. More vacancies are a sign American companies were planning to expand at the end of the first quarter, undaunted by the jump in fuel costs or concerns that global economic growth will slow. The pickup is a “positive” development after a report last week showed payrolls in April grew at the slowest pace in six months, said economist Lou Crandall.
“Businesses were becoming a bit more willing to commit to new hires,” Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey, said in an interview. “The progress is incremental at best and the levels are still very low.”

Factories in U.S. Grow Less Optimistic About Sales (Source: Bloomberg)
Manufacturers in the U.S. became less- optimistic about 2012 sales growth than at the end of last year, while service companies grew more upbeat, according to a survey by the Institute for Supply Management. Purchasing managers at U.S. factories said they anticipate sales will grow 4.5 percent this year, less than a 5.5 percent December prediction, according to the Tempe, Arizona-based group’s semiannual forecast issued today. By contrast, service providers estimated revenue will climb 4.8 percent this year, up from the 3.1 percent forecast in December. Factory managers remain confident enough that they estimate spending on new equipment will climb by 6.2 percent in 2012, compared with a 1.9 percent increase projected in December, today’s report showed. Service providers forecast a 3.6 percent pickup in investment.
“Manufacturing continues to demonstrate its strength and resilience in the midst of global economic uncertainty and volatility,” Bradley Holcomb, chairman of the group’s factory committee, said in a statement. Manufacturers projected employment will increase 1.4 percent for the rest of this year, while service companies predicted a 1.9 percent gain.

China Growth Shift Splits KFC, Hydraulics (Source: Bloomberg)
Rising profits in China for Yum! Brands Inc. (YUM) and slowing sales for electrical-equipment maker Eaton Corp. are signs of a shift in the nation’s economy toward being driven more by consumers. Yum, the operator of Pizza Hut and KFC restaurants, is counting on rising incomes in the world’s second-largest economy and said one measure of operating profit in China rose 14 percent in the first quarter. Eaton cited the same “fundamental change” in China’s economy toward consumption for weakness in its business there. The transition may be evident in reports starting tomorrow, which will probably show imports picked up in April and retail sales held pace while exports and fixed-asset investment decelerated, according to Bloomberg News surveys. The shift will help sustain growth, even as policy easing has a bigger impact driving expansion in the short run, said Tim Condon, chief Asia economist at ING Financial Markets.
“The rebalancing is definitely taking place,” said Condon, who is based in Singapore and formerly worked at the World Bank. In addition, recent easing indicates full-year growth will pick up to about 8.5 percent, he said.

Worst Rupiah Start Since 2005 Pressures Indonesia (Source: Bloomberg)
Indonesia’s central bank will probably consider steps to curb excess funds in the economy and extend a pause in interest-rate cuts as the second-worst performing currency in Asia highlights the threat from inflation. Bank Indonesia will keep the reference rate at 5.75 percent tomorrow, according to all 21 economists surveyed by Bloomberg News. The central bank has left its benchmark unchanged since an unexpected reduction in February. Investors are demanding higher yields to hold Indonesian debt and the rupiah slid to the weakest in almost two years last week amid uncertainty over how the central bank will contain inflation and the impact of the government’s evolving fuel policy. Pressure to reverse monetary easing is climbing as price gains reached 4.5 percent in April, the fastest pace after Singapore among Southeast Asia’s five biggest economies, and growth held above 6 percent for a sixth quarter.
Faster inflation has made “a stronger case for the central bank to start unwinding some of its monetary loosening,” said Gundy Cahyadi, a Singapore-based economist at Oversea-Chinese Banking Corp. who expects Bank Indonesia to start adjusting the minimum level for the overnight rate or raise its reserve requirement rate as early as this week. “As for the BI rate, it is unlikely to be touched for now, given that there is little urgency to do so.”

Gillard Ends 42 Years of Spending Gains for Surplus (Source: Bloomberg)
Australia’s government will cut spending for the first time in at least 42 years as Prime Minister Julia Gillard ends four years of budget deficits, giving the central bank flexibility to lower interest rates. The underlying cash surplus will be A$1.54 billion ($1.56 billion) in the 12 months to June 30, 2013, Treasurer Wayne Swan said in Canberra yesterday. Expenditures are forecast to fall to A$364.2 billion next year, the first drop in figures dating back to 1971. The A$44.4 billion deficit this year is the third- largest on record and 3 percent of gross domestic product. “The surplus years are here,” Swan said in a speech to parliament after he scrapped a planned corporate tax cut. A balanced budget will “provide a buffer against global uncertainty, and continue to give the Reserve Bank room to cut interest rates for families,” he said.
Gillard’s bid for a A$46 billion fiscal reversal risks slower growth heading into an election year with polls showing the opposition Liberal-National coalition would win in a landslide. She’s betting tighter budgets will put the onus on the central bank to further reduce the highest benchmark rate among major developed nations and win a political dividend in an economy where 90 percent of mortgages have floating rates.

German Industrial Output Rises More Than Forecast (Source: Bloomberg)
German industrial output rose more than three times as much as economists forecast in March, adding to signs Europe’s largest economy may have avoided recession. Production jumped 2.8 percent from February, when it dropped 0.3 percent, the Economy Ministry in Berlin said today. February output was revised up from a 1.3 percent decline. Economists forecast a March gain of 0.8 percent, the median of 38 estimates in a Bloomberg News survey shows. In the year, production advanced 1.6 percent when adjusted for working days. Germany’s economy shrank in the final quarter of 2011 as the euro region’s debt crisis damped demand for its goods. Today’s report is the latest to suggest a second quarter of contraction -- the technical definition of recession -- may have been averted as companies tap faster-growing Asian markets. Factory orders gained a better-than-forecast 2.2 percent in March and business confidence unexpectedly rose to a nine-month high in April.
“The debt crisis damps demand for German products in Europe but Russia, China, India, Brazil and South Africa should generally be able to compensate declining sales,” said Gerd Hassel, an economist at BHF Bank AG in Frankfurt. “Germany’s recovery is also based on strong domestic demand as high employment, rising wages and increasing investment fuel consumption and industrial output.”

Greek Default Risk Returns as Bond Maturity Nears (Source: Bloomberg)
Two months after forcing through the biggest-ever sovereign bond restructuring, Greece once again faces the prospect of becoming the first developed nation to default on its debt. The government taking office after this weekend’s election has 30 days to decide whether to make today’s interest payment on 20 billion yen ($250 million) of 4.5 percent notes maturing in 2016, or default. Then, by May 15, officials must decide if they’re going to repay the 436 million euros ($555 million) due on a floating-rate note issued a decade ago. These are among about 7 billion euros of bonds whose holders took advantage of being governed by foreign rather than Greek law to sidestep losses suffered under the private-sector involvement rescheduling, or PSI. Paying the holdouts in full would arouse the ire of Greek taxpayers, as well as investors who cooperated with PSI. A failure to pay would signal Europe’s debt crisis is worsening.
“This poses a real challenge to the Greek government,” said Mario Blejer, vice chairman of Banco Hipotecario SA in Buenos Aires, who ran Argentina’s central bank in the aftermath of his country’s default. “If they pay, the new emerging government will be fiercely criticized for paying the foreigners in full after imposing huge losses on small domestic savers. If they don’t pay, they can expect much litigation, as we have experienced here in Argentina.”

Banks Battling European Debt Crisis Lose on African Deals (Source: Bloomberg)
The colonial ties that bound French and Portuguese banks such as BNP Paribas SA (BNP) and Banco Espirito Santo SA (BES) to Africa are being loosened by the European debt crisis. Lenders from Lisbon and Paris are retreating from funding projects in Africa as they ride out debt woes at home and prepare for more stringent global capital rules. Citigroup Inc. (C), Standard Chartered Plc (STAN) and Barclays Plc (BARC) are filling the gap, while Johannesburg-based Standard Bank Group Ltd. (SBK) and Nedbank Group Ltd. (NED) are boosting mining and oil loans to benefit from an investment surge in the world’s poorest continent. “We’ve definitely seen European banks not as aggressive, or in some cases actually leave this space,” Daniel Hanna, Standard Chartered’s southern African head of origination and client coverage, said by phone from Johannesburg on April 5. That’s “across the various different products, whether it’s syndication, finance, or project finance,” he said.
Citigroup was the leading arranger of syndicated loans in sub-Saharan Africa over the past 12 months with nine deals worth $1.2 billion, followed by London-based Standard Chartered. BNP, France’s largest bank, ranks 25th, with three transactions, according to data compiled by Bloomberg. Between 2008 and 2010, BNP was among the top five.

20120509 0946 Soy Oil & Palm Oil Related News.

Market Recap: Soybean Futures  (Source: CME)
Soybean futures came under heavy pressure today and finished low-range, with losses of 23 1/2 to 27 1/2 cents in the May through August contracts, with deferred months 9 to 15 1/4 cents lower. The fact that the soybean market again ignored fresh soybean demand news (225,000 metric tons [MT] were sold to China for combined marketing years) signals the market believes the upside has been overdone and that strong demand is already factored into prices.

Soybean Complex Market Recap  (Source: CME)
July Soybeans finished down 27 1/2 at 1438 1/4, 33 off the high and 4 up from the low. November Soybeans closed down 13 at 1340 1/2. This was 7 1/4 up from the low and 20 3/4 off the high. July Soymeal closed down 9.2 at 417.3. This was 2.3 up from the low and 10.9 off the high. July Soybean Oil finished down 0.31 at 53.27, 0.7 off the high and 0.24 up from the low. Unlike the other grains, the soybean market saw aggressive long liquidation selling to drive the market sharply lower on the session as speculative sellers were active for much of the session. The market pushed slightly lower early in the session as the new buying from China was not enough to offset the negative tone from outside market forces and speculator long liquidation selling ahead of the Supply/demand report may have accelerated when the stock market took a more serious tumble. A sharp break in gold, copper and crude oil and a strong US dollar added to the bearish tone. Talk of the record high net long position from speculators as of May 1st added to the liquidation selling fears. The USDA confirmed sales of 225,000 tonnes of US soybeans to China which included 60,000 for the 2011/12 season and 165,000 for the new crop season. In addition, the USDA confirmed the sale of 40,000 tonnes of soybean oil to unknown destination for the 2012/13 season. Strength in old crop corn and wheat helped to provide some support but the dominate force of the day was speculative selling which drove July to the lowest level since April 20th and November to the lowest since April 18th.

VEGOILS-Palm oil up on bargain hunting; data eyed
SINGAPORE, May 8 (Reuters) - Malaysian palm oil futures gained, recovering from an 8-week low on Monday triggered by economic fears in the euro zone and the United States, as buying interest returned.
"The market is trying to consolidate. There was a sell down yesterday and some adjustment came in (before closing), and the market continued its recovery today," said a trader with a foreign commodities brokerage in Malaysia.

Japan 2011 soybean output down 1 pct - U.S. attache
May 7 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Japan:
"Although there is a long history of soy production in Japan, in 2011 domestic production was merely 23 percent of the volume of soy food consumption. Prospects for increased production through improved yields or other means remains limited by various factors including the lengthy rainy season, and the failure of Japanese agriculture to adopt higher biotech seeds with higher yield potential.

S.America drought seen paring world soy inventories
CHICAGO, May 7 (Reuters) - Estimates of South American soybean production continue to shrink as farmers harvest the remainder of the Southern Hemisphere crop, a factor that is driving down forecasts for U.S. and global inventories.
However, analysts expect a rebound in world soy supplies for 2012/13 on ideas that high prices will inspire South American farmers to plant aggressively in that crop year.

Soybeans Decline as European Debt Crisis Curbs Speculator Demand (Source: Bloomberg)
Soybeans dropped the most since January on concern that an intensifying European debt crisis will slow global economic growth, curbing investment demand for commodities as a hedge against inflation. The dollar extended its longest rally against the euro since 2008 as Greece faced the prospect of becoming the first developing nation to default on its debt. The prospect of slowing demand cooled soybean prices that reached a 45-month high last week as hedge funds made their largest bet on a rally in prices since at least June 2006, government data show. “The European debt crisis encouraged the funds to cut their long positions,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “People are nervous about demand after the rally.”
Soybean futures for July delivery fell 1.9 percent to close at $14.3775 a bushel at 1:15 p.m. on the Chicago Board of Trade, the largest decline since Jan. 30. On May 2, the most-active futures touched $15.125, the highest since July 2008. Soybeans are the second-largest U.S. crop, valued at $38.9 billion in 2010, behind corn, government data show.

Soy-Crop Bust Spurs China to Drain U.S. Bins: Commodities (Source: Bloomberg)
U.S. soybean stockpiles are poised to drop to the lowest relative to consumption since at least 1965 after the worst drought in five decades decimated crops across South America, driving China to buy more from Midwest farmers. Inventories will decline 20 percent to 172 million bushels (4.68 million metric tons) before next year’s harvest in the U.S., the largest grower, according to the average of 31 analyst estimates compiled by Bloomberg. This year’s 19 percent rally may extend another 11 percent by the end of June to $16 a bushel, according to Linn Group, a brokerage and researcher based in Chicago. Prices reached a record $16.3675 in 2008. The U.S. Department of Agriculture cut its forecasts for the South American crop four times in as many months after predicting record supplies as recently as December. The estimates are scheduled to be updated May 10.
Imports by China, where demand doubled since 2004, will advance to a record 55 million tons this year as farmers feed a hog herd expanding 4.4 percent to a record 690 million animals, USDA data show. “Prices may top the 2008 peak if Chinese demand doesn’t slow or there are any threats to the U.S. crop this summer,” said Christopher Narayanan, the head of agricultural commodities research for Societe Generale in New York. “China’s soybean imports have grown at a rate of more than 17 percent annually the last 10 years, and the biggest risk is that demand won’t slow.”

Anticipation over declining crude palm oil (CPO) production due to ageing plantations in major producing countries including Malaysia, would likely bolster the commodity to hit RM4,000 per tonne by second half this year, according to industry players. Malaysian Estate Owners Association president Boon Weng Siew who pegged the country's total planted area with palm trees of over 20 years old to between 30% and 40%, said many of the ageing palm trees in Malaysia were mostly under the smallholders' holdings. Smallholders contributed 52% of total CPO production while the rest was from large plantation companies, according to National Association of Smallholders. "It was difficult to persuade them [to carry out replanting] especially with the CPO price trading above RM2,000 per tonne over the past three to four years", said Boon. (StarBiz)

20120509 0946 Global Commodities Related News.

Commodities Erase 2012 Gains as Economic Outlook May Dim Demand (Source: Bloomberg)
Commodities fell, nearly erasing this year’s gains, as the struggle by Greek political leaders to form a coalition underscored growing concern that the region’s debt crisis will worsen, dimming prospects for raw-material demand. The Standard & Poor’s GSCI Spot Index dropped for a fifth straight session, heading for its worst run since August. The measure lost as much as 1.6 percent to 641.8, the lowest since Dec. 29, erasing the yearly gain before paring losses. The gauge, which tracks 24 raw materials, was at 648.6 as of 3:42 p.m. in New York, up 0.6 percent for the year. Sugar, silver, gold and soybeans led the declines. The last annual slump was in 2008.
Raw materials retreated as Greek political leaders met for a second day in a bid to form a government. New Democracy’s Antonis Samaras failed to forge an agreement following an election that raised questions about the euro membership. Reports showed last week that services and manufacturing output shrank in April in the euro region, and unemployment rose to a 15-year high. “We’re in a deflationary credit contraction situation globally,” said James Dailey, who manages $215 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. “The banking systems in China, Australia, and obviously much of Europe are under severe stress, and that’s creating this kind of deflationary contraction that’s starting to unfold. You’re starting to get a smell of panic in the air and a shift towards bearishness in commodities broadly.”
Sugar dropped the most in six weeks, and crude oil fell for a fifth session, capping the longest slump in three months. Gold slipped below $1,600 an ounce for the first time since January, copper declined the most in almost five weeks, and orange-juice futures tumbled to the lowest price since 2009. Seventeen of the commodities tracked by the GSCI were lower.

Market Recap: Wheat Futures  (Source: CME)
Chicago wheat closed fractionally to 3 cents higher in most contracts, with Kansas City 3 to 5 cents higher. Minneapolis wheat ended mostly 2 to 3 cents lower. Wheat futures enjoyed slight gains throughout the morning on spillover from corn futures and a downturn in the condition of the HRW wheat crop. But as corn moved off its session highs late due to spillover from sharp weakness in key outside markets like crude oil and gold futures, wheat followed suit.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 3 at 615, 6 1/4 off the high and 3 3/4 up from the low. December Wheat closed up 1 1/2 at 652 1/2. This was 3 up from the low and 5 3/4 off the high. On a day of exceptionally weak outside market forces, July wheat managed to push to a 4-session high to close higher on the day. With a bearish tone to outside market forces, the market did not see too much selling as traders see more short-covering ahead of the USDA Crop Production and supply/demand reports for Thursday. Ideas that the market is oversold with fund traders holding a hefty net short position helped to support. European economic concerns, a stock market set-back and a rally in the US dollar are all factors which would normally cause increased selling but the tendency to "lighten up" on all positions when the financial markets turn more volatile seems to be supporting a short-covering trend. News of a slight deterioration in the winter wheat condition plus a surge in old crop corn futures helped to support as well. Jordan bought 50,000 tonnes of hard wheat at their tender. European milling wheat futures closed up 1.5% as the market followed US markets higher. July Oats closed up 1/4 at 337 3/4. This was 3/4 up from the low and 4 3/4 off the high.

Market Recap: Corn Futures  (Source: CME)
Corn futures closed fractionally to 5 1/2 cents higher, which was anywhere from low-range (May contract) to the upper third of today's range (new-crop contracts). May corn futures, which are in delivery, posted a very broad 21 1/2 cent trading range today as early double-digit gains gave way to a late-session price drop. Deferred futures weren't as volatile, but the December contract posted a 10 1/2 cent range.

Corn Market Recap for 5/8/2012  (Source: CME)
July Corn finished up 3 at 623, 9 1/4 off the high and 4 1/2 up from the low. December Corn closed up 3 1/4 at 528. This was 7 1/2 up from the low and 3 off the high. Corn managed to buck the trend of most other commodity markets to see periods of strong gains on the day with July and December corn closing slightly higher on the day. A sharp break in soybeans and other financial sensitive commodity markets helped to pull the market off of the mid-session peak. Talk of potential strong demand from China, a lack of deliveries and a very strong cash market helped to support the market early today. A lack of confirmation from the USDA on new China demand, better than expected planting progress and weakness in gold, energy and equity markets were factors which did not seem to spark much selling. In fact, July corn was still moderately higher on the session into the mid-day while May corn pushed sharply higher and to the highest level since September 27th. Ideas that the USDA will tighten ending stocks for the 2011/12 season on Thursday helped to support the rally as well and talk that ending stocks for the 2012/13 season will sharply recover to near 1.7 billion bushels helped to hold December corn in check today. July Rice finished up 0.08 at 15.295, equal to the high and 0.065 up from the low.

GRAINS-Corn up on near-term supply concerns, Chinese demand talk
SYDNEY, May 8 (Reuters) - U.S. corn futures rose, supported by worries over near-term inventories and rumoured Chinese demand, which helped overshadow stronger-than-expected data from the U.S. Department of Agriculture on planting.
"There are some concerns about how low inventories of old-crop corn are, while there is some continued Chinese demand for corn at these prices," said Abah Ofon, softs analyst at Standard Chartered.

Corn, soy planting pace tops analysts' expectations
CHICAGO, May 7 (Reuters) - U.S. corn and soybean farmers kept their planters rolling during the past week -- with particular progress made in the northern states -- despite spotty rain showers could have slowed their efforts, a U.S. Agriculture Department report showed on Monday.
The USDA report showed 71 percent of the corn crop was planted as of May 6, up from 53 percent a week earlier. Soybean planting was 24 percent complete compared to 12 percent a week earlier.

POLL-China 2012/13 corn imports seen climbing 60 pct
BEIJING/SINGAPORE, May 7 (Reuters) - China's corn imports are likely to jump almost 60 percent in the year to September 2013, turning it into the world's fourth-largest buyer as Beijing strives to supply livestock feed to meet fast-growing demand for meat and cool near record prices.
The world's second-biggest consumer and producer of corn is projected to buy 7.9 million tonnes in 2012/13, up from an estimated 5 million tonnes this year, according to a Reuters survey of 10 analysts and traders.

Farmers to strike in top Argentine grains province
BUENOS AIRES, May 7 (Reuters) - Farmers in Argentina's top farming province will halt grains and livestock sales for four days starting Thursday to protest a planned tax hike, but exports should not be affected, an agricultural leader said on Monday.
The protest in Buenos Aires province could spread if provincial legislators vote to raise land taxes, said Julio Curras, vice president of the Argentine Agrarian Federation (FAA), noting that some growers say higher taxes could put them out of business.

Brazil analyst cuts soy view, sees record corn
SAO PAULO, May 7 (Reuters) - Brazil grain analyst Celeres made a further deep cut to its forecast for the country's 2011/12 soybean crop on Monday, lowering its view to 64.95 million tonnes from its early April estimate of 67.9 million.
The world's No. 2 soy producer suffered harsh drought in the southern growing states early in the year. Analysts have been steadily cutting their forecasts as the drought damage to the now nearly mature crop becomes fully apparent.

Egypt's GASC sees bigger food purchasing bill
CAIRO, May 7 (Reuters) - Egypt, the world's biggest wheat importer, will hike its food purchasing bill for the fiscal year that starts in July from a year earlier to cope with rising global prices as its economy reels from months of political instability.
Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), said the state budget for fiscal year 2012/13 would include a food purchasing bill exceeding the $24 billion earmarked for 2011/12 that ends in June.
US corn stocks may soar 130 pct next year
CHICAGO, May 7 (Reuters) - Corn supplies in the United States, currently on track to reach a 16-year low this year, are expected to soar nearly 130 percent next year to a six-year high as farmers plant the largest corn area in 75 years.
An expected record corn crop; steady to slightly higher demand from exporters, livestock sector and fuel makers plus competition from feed wheat will combine to pressure prices beginning with the new-crop marketing year on Sept. 1, analysts said.

US wheat production seen up after mild winter, wet spring
CHICAGO, May 7 (Reuters) - Near-perfect growing conditions in key production areas of the U.S. Plains throughout the winter and spring should increase the U.S. winter wheat crop by nearly 10 percent from last year for the biggest harvest since 2008, according to a Reuters poll.
A bumper crop will add to the already-ample U.S. stockpile. Wheat prices have been pressured as harvest expectations have risen during the past few weeks.

SOFTS-Raw sugar slips, holds above 1-year low
LONDON, May 8 (Reuters) - Raw sugar futures edged lower, as the global sugar surplus continued to drag on prices, while coffee and cocoa also eased, inline with weaker outside markets including world stocks and oil.  Raw sugar futures on ICE eased, consolidating above last week's one-year low, as recent upward revisions to the expected 2011/12 global surplus weighed on prices.

Vietnam Coffee-May shipments may fall, discounts steady
HANOI, May 8 (Reuters) - Vietnam's coffee exports in May could fall to 110,000 to 130,000 tonnes (1.83-2.17 million bags) from an estimated 150,000 tonnes shipped in April, due to lower prices for farmers, traders said on Tuesday.
Prices hovered below a key psychological level of 40,000 dong ($1.92) per kg for most of April, which discouraged farmers from releasing stocks to exporters, traders said.

EU 12/13 sugar output seen 15.5 mln tonnes-attache
May 7 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in the European Union:
"For MY 2012/13, EU sugar production is forecast at 15.5 million tonnes on a raw sugar basis, dropping 10 percent back to 2010/11 levels. Sugar imports in MY 2012/13 are forecast to drop slightly to 3.3 million tonnes, while exports are forecast at 1.5 million tonnes, falling 40 percent from this year but remaining above 2010/11 levels.

Zambia Sugar sees 2012/13 output above 400,000 T
LUSAKA, May 7 (Reuters) - Zambia Sugar , a unit of South Africa's Illovo Sugar , expects its sugar output to increase by more than 7 percent to over 400,000 tonnes in the current 2012/2013 season from last year, it said on Monday.
The company, which produced 374,000 tonnes of sugar in the  last season to end March, said it expected output to rise due to good climatic conditions, increased age of cane and a larger planted area.

Vanishing volatility in the oil market
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, May 8 (Reuters) - The most remarkable thing about Friday's sudden drop in oil prices was not how large the move was but how small. The small size of the decline confirms there has been a structural shift in oil market volatility
On May 4, front-month Brent futures  fell by $2.90 per barrel (2.50 percent) from the previous night's close. It was the largest one-day decline so far this year, and the second-largest move in either direction since January 3.

OIL-Oil falls below $113 on slowdown, higher output
LONDON, May 8 (Reuters) - Brent crude oil fell below $113 a barrel on Tuesday in a fifth day of losses as economic slowdown on both sides of the Atlantic deepened fears of lower oil demand at time of ample supply from major oil producers.
"Renewed concerns over the health of the euro zone coincide with weaker growth elsewhere and news of better oil supply," Weinberg said. "Saudi Arabia is pumping plenty of oil and even storing it, so there is no shortage."

Philippine, China firms discuss South China Sea gas project
MANILA, May 8 (Reuters) - The Philippines' Philex Petroleum Corp  said on Tuesday it has discussed a possible partnership with Chinese offshore oil producer CNOOC to develop a natural gas prospect in the disputed South China Sea, a deal that may help ease tension between the two sides.
China meanwhile warned the Philippines that confrontation over an island in the South China Sea could worsen and Beijing has made "every preparation" to counter what it called potential expansion of the conflict by Manila.

Shell in talks to cut Iraq's Majnoon output target
BAGHDAD, May 8 (Reuters) - Royal Dutch Shell  is in talks with Iraq to cut the final production target of the Majnoon oilfield to 1 million bpd from 1.8 million bpd, according to oil ministry documents seen by Reuters, in a move that may kickstart talks with other firms to review the country's overall production target.
Shell executives met with oil ministry officials on March 15 and also proposed to extend the oil field's plateau time, which is to begin in 2017, to "more than" 20 years from seven years.

Taiwan Formosa plant to run below 70 pct in June
SINGAPORE, May 8 (Reuters) - Taiwan's Formosa Petrochemical Corp said on Tuesday it expects to operate its 540,000 barrels per day (bpd) refinery in Mailiao at between 65 percent and 67 percent of its capacity in June, as maintenance reduces runs from May's rate of around 70 percent.
The refiner operates three crude distillation units (CDUs) at 180,000 bpd each. It will shut one of these units on May 10 for about 45-50 days as planned, the company spokesman said.  

Petro-dollar windfall could help China's rebalancing
BEIJING, May 7 (Reuters) - A $1 trillion oil-fired trade windfall couldn't be better timed to help Chinese companies climb the value chain and rebalance the economy of the world's biggest exporter.
Fast growing countries producing oil and other commodities, are taking advantage of the windfall from the recent surge in prices and buying roughly half of the $2 trillion worth of goods sold by China overseas.

U.S. working with India on Iran oil replacements-Clinton
NEW DELHI, May 8 (Reuters) - The United States is working with India to secure alternative sources of crude supply to Iran, Secretary of State Hillary Clinton told a news conference on Tuesday, as Washington pressures its allies to reduce oil imports from Tehran.
Carlos Pascual, the U.S. negotiator who has been pressing Iran's customers to cut imports, would visit India next week to discuss the issue. On Monday, Clinton said the United States was encouraged by steps India had already taken to cut but that "even more" was needed.

Saudi's Naimi says kingdom pumping 10 mln bpd
TOKYO, May 8 (Reuters) - Top oil exporter Saudi Arabia is pumping at around 10 million barrels per day (bpd), and is storing 80 million barrels to meet any sudden disruption in supplies, Oil Minister Ali al-Naimi said on Tuesday.
Worries of a supply disruption from the Middle East due to escalating tensions between the West and Iran over Tehran's disputed nuclear programme pushed Brent prices 20 percent higher since the start of the year to a record of over $128 in March.  

Oil Trades Near Three-Month Low as Report Shows Rising Supplies (Source: Bloomberg)
Oil traded near the lowest level in three months in New York after a report showed stockpiles climbed the most since March in the U.S., the world’s biggest crude consumer. Futures were little changed after dropping for a fifth day yesterday. U.S. supplies increased 7.8 million barrels last week to 378 million, the highest level since August 1990, figures from the American Petroleum Institute showed after the settlement. A government report today may show supplies rose 2 million barrels, according to a Bloomberg News survey. Oil’s decline stalled after it fell below its 200-day moving average. Crude for June delivery was at $97.15 a barrel, up 14 cents, in electronic trading on the New York Mercantile Exchange at 9:28 a.m. Sydney time. It slid 1 percent yesterday to $97.01, the lowest close since Feb. 6. Front-month prices are down 1.7 percent this year.
Brent oil for June settlement dropped 43 cents, or 0.4 percent, to $112.73 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $15.72. New York crude pared declines after it fell below its 200- day moving average. Buy orders tend to be clustered near chart- support lines. The level is at about $96.29 today, according to data compiled by Bloomberg.

Silver Forecasters Bullish as Funds Retreat From Slump (Source: Bloomberg)
At a time when hedge funds are reducing bullish silver bets by the most in two years, analysts predict a rally as manufacturing expands from China to the U.S., boosting demand for the precious metal most used in industry. Money managers cut wagers by 68 percent in two months as futures tumbled 21 percent, Commodity Futures Trading Commission data show. Prices will rally to average $35.40 an ounce in the fourth quarter, the third-highest on record, according to the median of 11 analyst estimates compiled by Bloomberg. Shares of Fresnillo Plc, the largest producer, will rise 24 percent in the next 12 months, based on the average of seven forecasts.
Silver, the most volatile metal tracked by Bloomberg, rose almost twice as much as gold this year on mounting confidence the global economy will skirt another recession. China’s factory output gained for a fifth month in April and U.S. manufacturing grew at the fastest pace in a year. Industrial demand from solar panels to batteries to film accounts for about 53 percent of consumption, the Washington-based Silver Institute estimates. “A greater amount of confidence in the global economy generally means higher growth and that means more silver demand,” said David Jollie, an analyst at Mitsui & Co. Precious Metals Inc. in London and the most accurate forecaster in last year’s London Bullion Market Association survey of silver prices. “If you look out beyond the end of the year, you can still see reasons to be bullish.”

LME Receives a Number of Proposals That May Lead to Takeover (Source: Bloomberg)
The London Metal Exchange, the world’s biggest metals bourse, received multiple proposals that may lead to a takeover. The proposals will be considered by the board, the LME said in a statement today. They were from companies that had been shortlisted after assistance from Moelis & Co., the LME’s adviser, according to the statement. Hong Kong Exchanges and Clearing Ltd. said April 30 that it was one of several companies looking to buy the LME. CME Group Inc., NYSE Euronext (NYX) and IntercontinentalExchange Inc. made preliminary offers, three people with direct knowledge of the matter said in February. Takeover bids for the LME, which handles more than 80 percent of industrial metals futures, had to be submitted by yesterday. Claire Miller, a spokeswoman for ICE in London, Allan Schoenberg, a spokesman for CME in London, and James Dunseath, a spokesman for NYSE in London, declined to comment. Chris Evans, a spokesman for the LME, said there’s nothing more to add to the statement.

China’s Gold Imports Jump as Country May Become Biggest User (Source: Bloomberg)
Mainland China’s gold imports from Hong Kong surged more than sixfold in the first quarter, adding to signs that the country may displace India as the world’s largest consumer of the precious metal on an annual basis. Imports from Hong Kong were 135,529 kilograms (135.53 metric tons) between January and March, from 19,729 kilograms in the year-earlier period, according to data from the Census and Statistics Department of the Hong Kong government. Shipments in March rose 59 percent from February, yesterday’s data showed. Demand has climbed in the world’s second-largest economy as rising incomes and curbs on property speculation boosted purchases. China may become the biggest user annually this year, according to a forecast from the producer-funded World Gold Council. Last year, total Indian demand including for jewelry and investment was 933.4 tons to China’s 769.8 tons.
“We’re looking at another solid year for Chinese demand based on these early numbers,” said Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd. “While it’s largely related to price, negative real interest rates should keep demand strong.”