Tuesday, May 22, 2012

20120522 1806 FCPO EOD Daily Chart Study.

FCPO closed : 3110, changed : +12 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : recovering, seller taking profit.
Support :  3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed little higher with thinner volume changed hand. Soy oil price currently trading little higher after overnight closed recorded more than 1% gain while crude oil price trading lower after having technical rebound.
Price traded side ways without clear direction within 37 points range bound market swinging between positive and negative territory through out the day and closed little higher after global markets traded firmer today.
Chart study still recommending a pullback correction downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120522 1751 FKLI EOD Daily Chart Study.

FKLI closed : 1535.5 changed : -1.5 point, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : recovering, seller taking profit.
Support : 1530, 1515, 1500, 1485 level.
Resistance : 1540, 1550, 1565, 1570 level.
Comment :
FKLI closed little lower with drying out volume transacted doing 11 points discount compare to cash market that closed firmer. Overnight U.S. markets closed rebounded higher ending 6 days falls and today Asia markets ended in positive tone while European markets currently trading firmer.
Markets sentiment improved after Germany Finance Minister statement of "considering all ideas on spurring euro area growth" following yesterday China boosting economy announcement. On other news, Fitch rating have downgraded Japan debt credit rating and Facebook recorded 11% decline after 2nd day of listing on the Nasdaq securities exchange.
Daily chart analysis again calling a pullback correction downside biased market development with lesser and lesser participation as investors maintained sideline avoiding current markets uncertainty condition(G-8 meeting, Europe debt development).
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120522 1712 Regional Markets EOD Daily Chart Study.

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

20120522 1621 Global Market & Commodities Related News.

Markets extended gains in Asia with investors hunting for bargains in shares beaten down to 2012 lows late last week, as hopes grew that Europe could agree on fresh action to tackle its debt crisis while promoting growth. U.S. stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak in a rebound from equities' biggest weekly drop in almost six months, but Facebook slumped in its second session after a disappointing debut.

The euro's rebound from four-month lows stalled on Tuesday, failing to break above a technical resistance, though traders said selling could be limited at least until an informal meeting of European leaders this week.

FOREX-Euro rebound stalls, focus shifts to EU summit
TOKYO, May 22 (Reuters) - The euro's rebound from four-month lows stalled on Tuesday, failing to break above a technical resistance, though traders said selling could be limited at least until an informal meeting of European leaders this week.
Traders have been reducing their massive bets against the common currency in the past couple of days, taking note of prospects - however slender - that EU leaders may agree measures to bolster investor confidence in the euro zone on Wednesday.

U.S. wheat slid 1.2 percent coming off an 8-1/2 month high hit in the previous session, as the market took a breather from a six-day rally sparked by crop-threatening dry weather in the United States and Russia.

Brent crude held steady near $109 awaiting the results of two meetings to tackle Europe's debt crisis and Iran's nuclear programme, which could determine the future of global oil demand and supply.

Iraq turns to U.S. drones to protect oil platforms
Iraq is buying unmanned drones from the United States to help protect its southern oil platforms as the OPEC nation ramps up production after the withdrawal of the last American troops, U.S. and Iraqi officials said on Monday.

China's Iran oil imports rebound on month, down on year
China's crude oil imports from Iran rebounded more than 50 percent in April from March after resolving pricing disputes over term contracts, but shipments fell nearly a quarter from a year ago, with Saudi Arabian supplies helping to plug the gap.

Xstrata sees China copper demand rebounding
Chinese demand for copper is likely to improve in the second half, the head of Xstrata's  copper unit said on Tuesday, as the miner pledged to lift output by about 60 percent over three years after some rivals have put the brakes on expansion.

Global steel output sluggish; market outlook weak
Global and Chinese crude steel production growth was sluggish in April, data from an industry body showed, and could slow further in the next few months as steelmakers tackle weaker demand and falling prices in what should be the most active period of the year.

COLUMN-Financiers' lifeline to aluminium producers
(Andy Home is a Reuters columnist. The opinions expressed are his own)
LONDON, May 21(Reuters) -    Global production of aluminium edged up by 131,000 tonnes annualised in April, according to figures released this morning by the International Aluminium Institute (IAI) and the China Nonferrous Metals Industry Association (CNIA).  
A 212,000-tonne increase in annualised production in China offset a modest 73,000-tonne decrease in the rest of the world.

Aluminium premiums highest in 2 years on tight supply
LONDON, May 21 (Reuters) - A supply shortage from aluminium producers and incentives paid by warehouses for material has lifted aluminium premiums to their highest in almost two years, with traders expecting them to remain at elevated levels for the coming months.
Traders said customers are buying on a hand-to-mouth basis, taking delivery of material for immediate needs, while avoiding booking contracts for next quarter in the hope that premiums could drop.

Alcan seeks record high aluminium premium from Japan buyers-sources
TOKYO, May 21 (Reuters) - Rio Tinto Alcan  has written to Japanese buyers asking them to pay a record premium of $200 per tonne for July-September primary aluminium shipments, citing tight supplies, two sources directly involved in the talks said on Monday.  
That compares with average premiums of $121-$122 paid over the London Metal Exchange cash price  in the current quarter. Buyers pay a premium in addition to the LME cash price to cover freight and insurance and to reflect regional supply and demand.

Xstrata sees China copper demand rebounding
SYDNEY, May 22 (Reuters) - Chinese demand for copper is likely to improve in the second half, the head of Xstrata's  copper unit said on Tuesday, as the miner pledged to lift output by about 60 percent over three years after some rivals have put the brakes on expansion.
Charlie Sartain said the company had earmarked roughly $7 billion to beef up its copper division, mainly in Chile, Peru and Argentina, and also in Australia.

Global steel output sluggish; market outlook weak
LONDON, May 21 (Reuters) - Global and Chinese crude steel production growth was sluggish in April, data from an industry body showed, and could slow further in the next few months as steelmakers tackle weaker demand and falling prices in what should be the most active period of the year.
Global steel production rose by only 1.2 percent in April compared with the same month last year, to 128 million tonnes, according to data released on Monday by the World Steel Association (Worldsteel).

London copper futures touched a one-week high  buoyed  just above $7,800 by bargain hunters betting on European and Chinese leaders taking steps to reinvigorate their economies.

Gold inched lower after failing to break above $1,600 an ounce, as investors await a European Union summit later in the week at which leaders will try to agree on action to solve the region's debt crisis.

METALS-LME copper gains for third day on EU summit hopes
SHANGHAI, May 22 (Reuters) - London copper futures touched a one-week high on Tuesday, buoyed  just above $7,800 by bargain hunters betting on European and Chinese leaders taking steps to reinvigorate their economies.
Uncertainty about the euro zone and the overall global economy are however likely to cap copper's gains. The metal is on track to lose over 7.5 percent this month, sharply cutting its year-to-date gains to around 2 percent from as much as 15 percent in February.

PRECIOUS-Gold stalls below $1,600/oz; EU summit eyed
SINGAPORE, May 22 (Reuters) - Gold inched lower on Tuesday after failing to break above $1,600 an ounce, as investors await a European Union summit later in the week at which leaders will try to agree on action to solve the region's debt crisis.
Gold made attempts to break above the key resistance level at $1,600 in the past two days but failed, and has since been drifting around $1,590 as investors remained cautious when the fate of Greece and euro zone remains in limbo.

20120522 1129 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets extend gains on value hunt, hopes for EU summit
Markets extended gains on Tuesday with investors hunting for bargains after prices reclaimed some ground off 2012 lows, as  hopes grew that Europe would embark on fresh action to tackle its debt crisis while promoting growth. "Last week was quite brutal in terms of the selling ... Was that totally necessary?," said Martin Angel, a dealer at Patersons Securities, adding that BHP, Rio Tinto and gold miners had been hit too hard. "I reckon there's good opportunities to pick them up while they're at these levels."  

COMMODITIES-Oil up strongly on China, G8; natgas tumbles
NEW YORK, May 21 (Reuters) - Oil closed up on Monday, having its first powerful rebound in weeks, and metals and grains edged higher too on China's call for more economic stimulus and the G8's support for Greece to stay in the euro zone.
"The big move down is behind us and there are some upside risks now," said John Davies, head of commodities research at Business Monitor International.

OIL-Oil rises on China calls for growth, Iran
NEW YORK, May 21 (Reuters) - Oil prices rose on Monday after China's premier called for more efforts to stimulate growth and as investors cautiously awaited results of Iran's second round of revived talks with major powers over Tehran's nuclear program.  
"China's central bank has already cut bank reserve requirements to stimulate growth and such comments suggest that even more may be done in the months ahead to ward off a hard landing," Addison Armstrong, a senior director at Tradition Energy, said in a note.

POLL-US crude stocks seen rising for 9th straight week
May 21 (Reuters) - U.S. commercial crude oil supplies were expected to have risen last week for a ninth straight week on higher imports, a preliminary Reuters poll showed on Monday.    
On average, domestic crude oil inventories were forecast up 1 million barrels in the week to May 18, according to the poll of seven analysts, with five out of seven projecting a build in inventories.

Iran plans oil export terminal outside Gulf
DUBAI, May 21 (Reuters) - Iran plans a new oil terminal outside the Strait of Hormuz to protect its exports against potential problems in the Gulf and to boost shipments of Caspian oil, the oil ministry news website said on Monday.
Tehran had threatened to block the vital Gulf oil shipping route during its long standoff with the West over its nuclear programme.

NATURAL GAS-US natgas futures end down 5 pct, longs take profits
NEW YORK, May 21 (Reuters) - U.S. natural gas futures ended down 5 percent o n M onday, retracing some of last week's sharp gains as investors with long positions took profits, but the decline was limited by signs of a tighter market and extended forecasts for warmer weather that could boost electrical demand to power air conditioners.  "The run up last week was partly technical - there were a lot of buy stops set off above $2.50 - but there are a lot of speculative long positions now, and today was a correction to that run up," a Pennsylvania-based trader said.

EURO COAL-Prices dip, Jly S.African trades at $93.10
LONDON, May 18 (Reuters) - European prompt physical coal prices dipped again by $1-2 on Friday, drawing some buying interest although most market participants are increasingly bearish about coal's near-term price outlook.
"There is still U.S. coal being offered but the last thing anybody wants is more coal because who would you sell it to?," one European trader said.

20120522 1023 Local & Global Economy Related News.

The Malaysia leading index (LI) decreased 0.5% mom in Mar (+1.7% mom in Feb). The coincident index (CI) increased 0.9% mom in Mar (+3.6% mom in Feb) while the lagging index rose 1.3% mom (unchanged in Feb). The level of diffusion index for both LI and CI remain above 50%, suggesting that the Malaysian economy will continue to expand albeit at a moderate rate in the near term. (Department of Statistics)

Economy: Australia to seal trade deal with Malaysia
Australia will sign a free trade agreement (FTA) with Malaysia on Tuesday in a move it hopes  will add new momentum to stalled bilateral trade talks with other key Asian trading partners.  Australia is still negotiating free trade deals with South Korea, Japan and China, with progress  in reaching agreement with Beijing and Tokyo slow.  Australia already boasts FTAs with New  Zealand, the United States, Singapore, Thailand and Chile, and reached a regional trade deal  with 10 ASEAN countries in 2010. The agreement with Malaysia is a step further than the  ASEAN deal, granting Australia's service sector the right to operate majority-owned  operations in Malaysia and allowing access to Malaysia without endorsement from other  ASEAN countries. Under the deal, more than 97% of tariffs on Australian goods sold in  Malaysia will be eliminated. In return Australia has agreed to accelerate the removal of  tariffs for goods from Malaysia. Malaysia is Australia's ninth-biggest trading partner with  two-way trade worth about $13bn a year. (Reuters)

Standard & Poor’s holds that foreign investment in Indonesia is being hampered by bureaucracy, corruption, legal uncertainty, infrastructure deficiencies and inflexible labour markets, maintaining the country’s sovereign debt at junk on the nation’s failure to reduce the fuel subsidy, among its concerns over government policy. (Business Times)

The Indonesian government has spent just over 10% of the total 2012 capital spending budget of Rp168.87tr in 1Q12, and aims to disburse 25% of capital spending by the end Jul, leaving 75% to be spent in 2H12. (Jakarta Post)

Thailand’s economy grew 0.3% yoy in 1Q12 (-8.9% in 4Q11), whilst on a qoq basis, GDP grew 11% after seasonal adjustment (-10.8% in 4Q11), thanks to recovery from the floods and the government’s stimulus measures to alleviate high living costs. The National Economic and Social Development Board also maintained its optimistic 5.5-6.5% GDP growth for 2012 and urged the Bank of Thailand not to tighten monetary policy early. (AFP, The Nation)

Thailand, the world's biggest rubber exporter, plans to buy more than 10,000 tonnes on the Tokyo and Shanghai exchanges to boost prices, said Rubber Estate Organisation managing director Chanachai Plengsiriwat. (The Nation)

China, holder of US$1.17tr of US Treasuries, can now bypass Wall Street when buying US government debt and go straight to the US Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters. (Reuters)

Japan’s all-industry activity index fell 0.3% mom in Mar (-0.1% in Feb), the third consecutive month of decline and worse than economists’ forecast of a 0.1% fall largely on the back of contraction in the construction sector. On a yoy basis, the measure stood at 5.5% in Mar (1.6% in Feb). (RTTNews)

Japan’s leading index rose to a revised 96.4 in Mar (96.1 in Feb; 96.6 in the initial estimate), whilst the coincident index climbed to 96.7 (95.2 in Feb; 96.5 in the initial estimate). The lagging index came in at 86.7 (86.3 in Feb), in line with the initial estimate. (RTTNews)

Japan is in talks with Myanmar on an investment treaty, with Tokyo eyeing terms to help its companies establish themselves in the isolated nation as it embraces democratic reforms. (AFP)

Germany and France pledged to do whatever was needed to keep Greece in the eurozone, with French Finance Minister Pierre Moscovici calling on Europe to support investment and economic growth in Greece “at a time when it is going through a violent recession.” (AFP)

China: Wen growth pledge spurs speculation of stimulus boost

Chinese Premier Wen Jiabao’s pledge to focus more on bolstering growth spurred speculation the government will step up efforts to combat a slowdown in the world’s second-largest economy. Wen called for “putting stabilizing growth in a more important position” and didn’t mention concern about inflation in remarks published yesterday by the official Xinhua News Agency. China may announce stimulus actions in the near term, according to a front-page commentary in the China Securities Journal, which is published by Xinhua. (Bloomberg)

EU: Merkel pressed to share German states’ debt costs
Chancellor Angela Merkel is being pushed by German states to share their borrowing costs to ease their budget squeeze, a policy she has opposed to confront the financial crisis in the rest of the euro region. The opposition Social Democrats plan to press Merkel on so- called Deutschland bonds at a meeting on 24 May, Norbert Walter- Borjans, finance chief of North Rhine-Westphalia, the nation’s biggest state, said in an interview. (Bloomberg)

EU: Construction output rebounded in March on Germany
European construction output rebounded in March, led by surging production in Germany and France, the euro area’s two largest economies. Construction in the 17-nation region increased 12.4% from February, when it declined a revised 10.4%, the European Union’s statistics office in Luxembourg said yesterday. From a year earlier, output slipped 3.8%. In Germany, Europe’s biggest economy, construction output climbed 30.7% from February, when it fell 16.9%, yesterday’s report showed. France reported a gain of 17.8%, while Italian production advanced 9.5%. Spain and Portugal had drops of 1.8% and 6.8%, respectively. The statistics office previously reported a monthly decline of 7.1% in the euro region for February, when unusually cold temperatures hurt construction output across Europe. Ireland and Greece are among countries that aren’t required to provide monthly data. (Bloomberg)

EU: Schaeuble pledges growth measures as Europe leaders prepare to meet
Germany will consider all ideas on bolstering euro area growth, Finance Minister Wolfgang Schaeuble said as he and his French counterpart, Pierre Moscovici, sought to fashion a new strategy amid the Greek electoral impasse. “We will engage all ideas constructively and find solutions in order to strengthen sustainable growth,” Schaeuble said after meeting Moscovici for the first time Monday in Berlin. Moscovici, who became finance minister last week, said President Francois Hollande wants everything on the table, including joint euro-area bonds.   The French push for growth comes as euro heads of state and government grapple with political support in Greece for parties which oppose the terms of the bailout the country has received from its partners. G8 leaders on May 19 urged Greece to stay within the euro area as polls in the country showed a close race between parties supporting and opposing the EU’s bailout deal. (Bloomberg)

EU: To accelerate aid payments to Spain on development projects
The EU said it agreed to speed up payments of infrastructure-development aid to Spain in a move that could accelerate the release of up to 939m euros ($1.2bn) for projects. Johannes Hahn, the EU commissioner  for regional policy, reached the agreement on Monday. The aid comes under the 27-nation bloc’s Cohesion Fund program. The EU said this will release up to 939m euros which can be paid quicker to beneficiaries of environmental and transport projects already completed. (Bloomberg)

US: Swaps clearinghouses said set for systemic designation
A panel of US regulators plans to designate some swaps clearinghouses as systemically important as soon as tomorrow, putting them under heightened supervision, according to two people familiar with the officials’ work. Clearinghouses are required to process most swaps in the $708trn over-the-counter derivatives market under provisions of the 2010 Dodd-Frank Act. The designation will be the Financial Stability Oversight Council’s first delineation of which companies aside from banks would threaten the financial system in the event of a failure. The panel is next scheduled to meet Tuesday. (Bloomberg)

US: End of extended benefits may lower US jobless rate
The declining US jobless rate may soon get another push downward as Americans lose extended unemployment benefits. From 7 April through 12 May, about 370,000 Americans in 23 states stopped getting the benefits, which provide payments for as long as 99 weeks, according to estimates from the National Employment Law Project. People in the remaining six states and the District of Columbia who still qualify may lose eligibility by September, bringing the program to an end, the report showed. Some recipients who lose their benefits may decide to accept jobs they view as less than ideal. Others may give up looking for work and drop out of the labor force, eliminating them from the ranks of the jobless. Those outcomes may trim the unemployment rate by 0.1 percentage point to 0.2 point in the next few months, according to economists Dean Maki at Barclays and Michael Feroli at JPMorgan Chase & Co. (Bloomberg)

20120522 1022 Malaysia Corporate Related News.

Mah Sing’s land buying since 2010 exceeds RM1bn
Mah Sing Group Bhd’s active landbanking moves have seen the developer acquiring some RM1.08bn worth of tracts across Malaysia in the last two years, including yesterday’s acquisition of 412 acres (165 ha) in Selangor’s Bangi enclave of RM333.25m principally from the Loh’s family. Before yesterday’s acquisition, Mah Sing had acquired some 555 acres for a collective value of RM750m. according to the developer’s filings with the exchange between Apr 2010 and Feb 2012. (Financial Daily)

Boustead offers a windfall for UAC shareholders
Shareholders of UAC Bhd are in for a windfall following Boustead Holdings Bhd’s offer of RM4.30 a share in its plan to privatise the Main Market company. The offer price, which includes a RM1-a-share dividend payout, represents a premium of about 50% over UAC’s five-day volume weighted average market price of RM2.87 as of last Friday. UAC’s shares were suspended from trading on Friday, pending the privatization announcement, at RM2.82. (BT)

GK Goh founder buys into E&O
Singapore-based GKG Investment Holdings Pte Ltd has emerged as a substantial shareholder in niche property developer Eastern & Oriental Bhd (E&O) following acquisitions of shares in the company on the open market last week. Filings to Bursa Malaysia showed that GK Goh founder and executive chairman Goh Geok Khim had acquired a total of 3m shares, representing about 0.27% stake in E&O from 16 to 18 May. (StarBiz)

New catering deal
Malaysia Airlines (MAS) is said to have re-negotiated its catering contract after 9 years where it will no longer pay a guaranteed monthly amount for catering services but only for what it takes from LSG Sky Chefs-Brahim’s SB (LSGB) for its in-flight catering services. It is learnt that renegotiations were concluded recently by the new team at MAS and will help MAS to restructure its cost base. (StarBiz)

Xingquan locks in sales orders worth RM400m at Quanzhou fair
Bursa Malaysia listed Xingquan International Sports Holdings Ltd says it received sales orders of RM400m for its GERTOP brand of shoes, apparels and accessories at the Autumn/Winter 2012 Sales Fair held in Quanzhou, Fujina Province, China. This was a 4.6% jump in sales compared to the same event last year, the fast growing outdoor casual wear enterprise in China said in a statement yesterday. (Malaysian Reserve)

Integrated Healthcare finishes marketing RM1.6bn loan
Integrated Healthcare Holdings Sdn Bhd has completed syndication of an about USD513m (RM1.6bn) equivalent loan after attracting total commitments of about USD183m – equivalent from Malayan Banking Bhd (Maybank), Oversea-Chinese Banking Corp (OCBC), RHB Bank Bhd and Sumitomo Mitsui Banking Corp SMBC, a person familiar with the matter said. (Malaysian Reserve)

AIA, Metlife among bidders for ING Asia
AIA Group Ltd and Metlife Inc are among companies that made offers for ING Groep NV’s Asia life insurance business, people familiar with the matter said. Manulife Financial Corp and Korea Life Insurance Co also submitted preliminary bids last week, the people said, asking not to be identified because the information is private. ING may give some of the bidders access to financial data in two weeks, two of the people said. (Malaysian Reserve)

Xingquan International Sports Holdings Ltd says it received sales orders of RMB826m (RM400m) for its GERTOP brand of shoes, apparels and accessories at the Autumn/Winter 2012 sales fair held in Quanzhou, China. It was a 4.6% jump in sales compared with that recorded at the same event last year, China’s fast-growing outdoor casual wear enterprise said in a filing to Bursa Malaysia yesterday. (BT)

MMC-Gamuda JV says there will be no extension of time (EOT) to complete the Ipoh-Padang Besar Electrified Double Track Project (EDTP). The project will be completed by the end of 2014, project director Datuk Paul Ha Tiing Tai said. "The project was granted an EOT from 2013 to 2014 by the government. There will be no new EOT for the EDTP beyond 2014," he said. It was earlier reported that the EDTP had hit a snag due to cost overrun and that MMC-Gamuda may ask RM1.5bn in variation order (VO) claims from the government. He stressed that there is no such VO, but in effect an expense and loss claim associated with the earlier EOT from 2013 to 2014, which is for actual additional expense incurred due to a delay caused by the government. The expense and loss claim is nowhere near RM1.5bn, he said. (BT)

Shareholders of UAC Bhd are in for a windfall following Boustead Holdings Bhd’s offer of RM4.30/share in its plan to privatise the company. The offer price, which includes a RM1/share dividend payout, represents a premium of about 50% of UAC’s five-day volume weighted average market price of RM2.87 as of last Friday. Boustead, controlled by Lembaga Tabung Angkatan Tentera, said yesterday it intended to privatise UAC, in which it owns a 65.2% stake, by way of a proposed selective capital reduction and repayment exercise (SCR) and dividend payout. UAC, which has been listed on the stock exchange since 1966,is a manufacturer and distributor of fibre cement building and construction products. (BT)

The Employees Provident Fund (EPF) has published the revised list of fund management institutions (FMI) and unit trust funds for 2012/2013 for the EPF members investment scheme (EPF-MIS). EPF public relations general manager Nik Affendi Jaafar said: “The list of funds under EPF-MIS is reviewed annually based on a set of evaluation criteria that focuses on the consistency of fund performance, as approved by the Ministry of Finance. “The evaluation process is carried out together with the Federation of Investment Managers Malaysia (FIMM) which represents the unit trust industry.”(Starbiz)

Masterskill's announcement that it is delaying plans to build its flagship campus is in line with speculation that the company may consider returning some of the proceeds IPO to shareholders. It said it will relocate RM76.9m balance IPO proceeds to be used as working capital. This is equivalent to 52.2% of the total RM147.6m raised from IPO. There have been recent reports that Masterskill would look into the possibility of distributing a portion of its listing funds as well as sell some assets to stave off declining student numbers and a tough operating environment. Management has, however, dismissed as speculation the news of a special dividend. (StarBiz)

Malaysia Airlines (MAS) has offered a maximum of two years of unpaid leave to its Malaysia-based employees as the flag carrier works out strategies to cut costs and seek RM6bn to fund a re-fleeting programme after losing RM2.52bn last year and aborting a share swap with competitor AirAsia. The programme is only for permanent MAS employees, excluding those in the MASWings division, MASWings Sdn Bhd and Firefly. This is the second time in recent times that MAS employees have been offered the option of unpaid leave. The first was during Datuk Seri Idris Jala’s time as the airline’s managing director when about 300 people took up the option. Some 2,600 others were laid off under a Voluntary Separation Scheme (VSS) in 2005, funded by the Treasury. (Malaysian Insider)

Malaysia Airline Systems Bhd is said to have re-negotiated its catering contracts where it will no longer pay a guaranteed monthly amount for catering services and only what it takes from LSG Sky Chefs-Brahim’s Sdn Bhd. A source said that with good inventory planning it will only uplift what it needs and this whole exercise helps it cut wastage and hopefully it translates in reduced cost for the airline. (Star Biz)

Salcon Bhd, a water and waste water solutions provider, is on the lookout for more acquisition opportunities in China as the company embarks on an aggressive expansion plan for the near term.The company, via several water treatment plants and concessions in China, has the capacity to treat 1.3bn litres per day of water. "We hope to increase the capacity to 3.0bn litre per day over the next two years. Then, only we will start to list our China assets on the stock exchange," said Salcon COO Ooi Cheng Swee during a media briefing here yesterday." "He was speaking to the media after signing a sale and purchase agreement with Darco Water Technologies Ltd. Salcon has agreed to buy a 60% cent stake in Darco Environmental Ptd Ltd for RM47.5m. Darco Environmental, which owns two water assets in China, is a wholly-owned unit of Darco Water Technologies, which is listed on the Singapore stock exchange. The acquisition is expected to generate total revenue of RMB1.7bn (RM842.5m) from the two water assets, which are in Wukang and Qian Yuan and have concession periods of 25 and 22 years respectively.(BT)

Nasim Sdn Bhd, local distributor of the Peugeot brand, has launched the highly-anticipated all-new Peugeot 408. COO Datuk Samson Anand George is confident the Peugeot 408 will contribute significantly to Nasim's sales target of 9,300 units this year, or 72% more than in 2011.The sedan is available in two variants: 408 Turbo and 408 2.0. (BT)

HeiTech Padu Bhd has won a RM34.5m software replacement and maintenance services contract from the Inland Revenue Board (IRB). The company said the contract was for three years and any further renewal or extension of the duration would be at the discretion of the board. (BT)

Brahim's Holdings has proposed to buy the remaining 49% stake in Brahim's-LSG Sky Chef Holdings Sdn Bhd (BLH) for RM130m cash. BLH's 70%-owned subsidiary, LSG Sky Chefs-Brahim's Sdn Bhd (LSGB) is involved in catering and catering related services. LSGB provides in-flight catering and related services at the Kuala Lumpur International Airport and Penang airport. LSGB has a 25-year concession expiring in 2028 to provide catering and related services to Malaysian Airline System Bhd at both airports. (Starbiz)

TAS Offshore Bhd has secured a major contract to sell two vessels for RM98m to a Middle-East client.The two anchor handling/oil recovery/support vessels are expected to be delivered by late 2013. The same client has over the years purchased 15 units of vessels from TAS. Group MD Datuk Lau Nai Hoh said the latest contract increased the total value of contracts won by TAS for financial year ending May 31 to RM182.5m. (Starbiz)

KFC Malaysia will make most of the new outlets it plans for this year, Drive Thru. There are plans for between 15 and 17 new outlets for the year. KFC Malaysia deputy president Alan Au said the longer operation hours and increasing appetite for it will drive the establishment of more Drive Thru outlets this year, despite the higher amount of investments needed. While a typical KFC outlet needs about RM 1m for set up, a Drive Thru outlet ranges between RM3m and RM4m. Currently, KFC has 46 Drive Thru outlets in Malaysia. Meanwhile KFC yesterday launched its latest offering, KFC Pokkits for a three month trial period. KFC Pokkits is a brand new Yum! Brands Inc innovation and Malaysia is the first country to launch this nation wide. (BT)

A group calling themselves the Caring Parents are asking Tasek Concrete S/B, a subsidiary of Tasek Cement to move out of its operations at Bukit Petaling. Its plant is just 300metres from the SJK (C) Kuen Cheng school. The school children are already suffering from skin allergies and eye irritation from the exposed cement dust. (BT)

Petronas Dagangan: Posts record revenue of RM6.85bn
Petronas Dagangan (PDB) has posted a record revenue of RM6.85bn for 1Q FY2012, an  increase of 7.36% from RM6,382.7m in the corresponding quarter last year. Profit before tax  increased by 7.64% to RM339.7m in the same period. PDB attributed the growth to higher  average product selling prices by 5.0% and higher sales volume by 1.5%. This was further  supported by an increase in other income by RM4.1m, which was offset by the higher  operating expenditures by RM16.7m due to depreciation and amortization, impairment of  property, plant and equipment as well as other finance costs. PDB MD and CEO Amir Hamzah  Azizan said specifically, the retail and commercial business segments remained the main  contributors to the group's strong performance. The group expects these segments to  maintain its lead. (Bernama)

Boustead Holdings: To privatise UAC for RM4.30 per share
Boustead Holdings is privatising UAC for a deemed offer price of RM4.30 per share via a  proposed selective capital reduction and repayment exercise (Proposed SCR) and a proposed  dividend by UAC. Boustead, which now has a 65% stake in UAC, said the exercise will involve  a selective capital reduction and a corresponding capital repayment to the shareholders of  UAC based on an entitlement date to be determined later.  As an integral part of the  proposals, it also proposed for UAC to pay a dividend to its shareholders. Boustead said that  under the proposed SCR, UAC’s shareholders will receive a total cash payment of RM85.4m  or RM3.30 per UAC share. Additionally, under  the proposed dividend, UAC minority  shareholders will receive a net dividend payment of RM1 per UAC share amounting to  RM25.9m. The deemed offer price of RM4.30 per UAC share represents a premium of 49.9%  above UAC’s  5-day volume weighted average market price of RM2.87 as at 18 May 2012  being the last trading day of UAC shares prior to its suspension. (Financial Daily)

Tan Chong Motor Holdings: Q1 earnings fall 57% but sees scaleable recovery
Tan Chong Motor Holdings' earnings fell 57.2% to RM31.67m in the 1Q2012 from RM74.08m  a year ago due to a significant reduction in supply and demand but it expects a scaleable  recovery. The company cited earthquakes, floods and tighter credit which had significantly  cut supply and demand as the reason for the 13.1% decline in revenue to RM982.59m from  RM1.131bn a year ago. EBITDA fell by 42.6% from RM129m to RM74m. EPS were 4.85 sen  compared with 11.35 sen. (StarBiz)

Eastern & Oriental: GK Goh founder buys into E&O
GKG Investment Holdings Pte Ltd has emerged as a substantial shareholder in niche property  developer E&O following acquisitions of shares in the company on the market last week.  Fillings to Bursa Malaysia showed that GK Goh founder and executive chairman Goh Geok  Khim had acquired a total of 3m shares, representing about 0.27% stake in E&O from May 16  to 18. The transactions were believed to have been done at around RM1.30 per share.  Following the transactions, Goh would now have direct interests of 1m shares, or 0.09%  stake, in E&O, and indirect interest of 58.1m, or 5.16% stake in the company. (StarBiz)

Mega First Corporation: Gets nod for Laos dam
Mega First Corporation’s executive chairman Goh Nan Kioh said the company has obtained  the approval of its environmental impact assessment (EIA) for its proposed 260MW to  380MW hydroelectric  dam in Laos’ Mekong River. The EIA for the Don Sahong dam was  approved last month, after almost 7 years. Goh said there is less construction risk for the  Don Sahong dam as it is a run-of-the-river (RoR) hydroelectric dam, which means it does not  require the construction of a massive dam to retain water like the Bakun dam. He said  another advantage of the Don Sahong dam is it will have a firm capacity of 90% in  comparison to Bakun dam which has a firm capacity of 50%. He also said the maximum  capacity of the dam they can build is 380MW, adding that research has however shown that  a 260MW is the optimum capacity. (Financial Daily)

TAS Offshore: Secures RM98m contract
TAS Offshore has secured a major contract to sell two vessels for RM98m to a Middle-East  client. The two anchor handling/oil recovery/support vessels are expected to be delivered by  late 2013. The same client has over the years purchased 15 units of vessels from TAS. Group  MD Datuk Lau Nai Hoh said the latest contract increased the total value of contracts won by  TAS for financial year ending May 31 to RM182.5m. In March, the group secured orders for  five tugboats worth RM22.7m and a sixth tugboat for RM2.5m from Indonesia. (StarBiz)

Land & General: Unit gets RM7.8m aid
Land & General (L&G) is providing up to A$2.5m (RM7.8m) to its 50%-owned subsidiary  Hidden Valley Australia Pty Ltd (HVA) within the next 12 months as financial assistance for a  proposed retirement estate project in Melbourne. The  company said that the proposed  retirement estate consists of 298 residential units, built as standalone and duplex-style  accommodation, with the average selling price at A$456,000 (RM1.42m) per unit, which is  expected to generate a project surplus of A$60.1m (RM187m). HVA is in the midst of  obtaining approvals from the Australian authorities to start the proposed project in 2H 2012.  The project, expected to be completed in Mar 2023, will be built in 10 stages. Each stage is  expected to take 12 months. The total gross development expenditure is estimated to be  A$116.2m (RM362.2m), which primarily will be funded with bank borrowings and internal  funds or collections from progress billings. (StarBiz)

MTD ACPI Engineering: Awarded RM500m MRT viaduct project
MTD ACPI Engineering’s wholly owned subsidiary MTD Construction Sdn Bhd has received a  letter of award worth RM499.98m from Mass Rapid Transit Corp Sdn Bhd. MTD said the job,  known as “Package V7” was for the construction and completion of viaduct guideway and  other associated works from Bandar Tun Hussein Onn to Taman Mesra. MTD said the 48- month project was expected to begin in July and be completed by Jun 2016. (StarBiz)

Technology: Disk makers see turnaround
Hard disk drive (HDD) component manufacturers in the country expect a healthy year for the  industry in 2012, after the industry was badly hit late last year by floods in Thailand. Eng  Teknologi Holdings expects to regain its world market share by the year-end or in early 2013. Group CEO Datuk Y.K. Teh said the group had to date injected approximately RM100m to  rebuild production capacity for its manufacturing plants in Thailand, China, the Philippines  and Johor, in view of the flooding in Thailand late last year. According to Trendfocus, a  premier data storage market research firm, worldwide shipment of HDD is expected to hit  680m units this year and 760m in 2013, compared with 622m in 2011. The worldwide  shipment of HDD for 1Q 2012 was about 120m units, and is expected to rise gradually from  120m to about 180m in 1Q 2012. (StarBiz)

20120522 1020 Global Market Related News.

Asia Stocks Rise Second Day as Germany, China Vow to Spur Growth (Source: Bloomberg)
Asian stocks rose for a second day after Germany’s financial chief pledged to consider growth measures for Europe. Companies that sell to China rose for a second day after the country’s premier pledged to support economic expansion. LG Electronics Inc. (066570), South Korea’s electronics maker that depends on Europe for 16 percent of its sales, rose 4.5 percent. Fanuc Corp., a Japanese industrial robot maker, and South Korea’s Samsung Electronics Co. (005930), both of whom count China as among their biggest markets, rose more than 3 percent. Tokyo Electric Power Co. (9501) gained 4.3 percent as the government may own as much as 76 percent of the operator of the crippled Fukushima nuclear plant. The MSCI Asia Pacific Index gained 0.9 percent to 113.78 as of 9:39 a.m. in Tokyo before the Hong Kong market opened, with more than six stocks rising for each that fell. The measure rebounded from a five-month low yesterday after Premier Wen Jiabao said China will focus more on spurring economic growth.

Japan Stocks Rise as Germany Agrees to Consider Growth Options (Source: Bloomberg)
Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) set for the biggest gain in five weeks, as Germany said it will consider all ideas to boost euro-area growth and China pledged to bolster its economy. Fanuc Corp. a producer of robotics for mainland factories, jumped 3.3 percent. Sony Corp. (6758), an electronics maker that depends on Europe for a fifth of its revenue, climbed 2.1 percent. Inpex Corp., the nation’s largest oil explorer by market value, gained 2.9 percent after crude prices yesterday advanced for the first time in seven days. “Stimulus measures by China, a country with the world’s No. 2 gross domestic product, is positive for the world economy,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “China may stimulate the economy or markets as the nation’s exports are getting sluggish due to the European economic slowdown.”
The Nikkei 225 Stock Average rose 1.1 percent to 8,724.2 as of 9:52 a.m. in Tokyo, heading for the steepest increase since April 18. Volume on the gauge was 11 percent less than the 30- day average. The broader Topix (TPX) gained 1.1 percent to 733.32, with almost five times as many shares advancing as falling. The Topix has plunged 17 percent from this year’s high on March 27 as China’s economic growth slowed and on renewed concern about Europe’s debt crisis. The political gridlock in Greece after an inconclusive election this month reignited fears the nation will renege on austerity pledges required for 240 billion euros ($307 billion) in aid and exit the euro. Futures on the Standard & Poor’s 500 Index (SPXL1) slid 0.1 percent today. The index gained 1.6 percent in New York yesterday, the biggest rally since March 13, after Chinese Premier Wen Jiabao pledged to focus more on bolstering growth.

German Stocks Rise, Snapping Five Days of Losses (Source: Bloomberg)
German stocks advanced, rebounding from the biggest weekly drop of the year, as Chinese Premier Wen Jiabao pledged to focus more on bolstering growth and Group of Eight leaders pushed for Greece to stay in the euro area. Software AG (SOW) and Infineon Technologies AG (IFX) led technology shares higher. Merck KGaA (MRK) and ThyssenKrupp AG (TKA) rallied at least 2.5 percent after UBS AG upgraded its recommendations on the shares. The DAX (DAX) Index climbed 1 percent to 6,331.04 at the close of trading in Frankfurt. The benchmark gauge retreated 4.7 percent last week, the largest drop since Dec. 16, amid growing concern that Greece will be pushed out of the euro. The broader HDAX Index also rose 1 percent today.
“It feels like a relief rally from oversold levels and confidence in seeing G-8 leaders all in similar tune,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. “The comments from Wen Jiabao were certainly nice to hear, but the euro story is still the main game in driving markets.” Faced with differences between Europe and the U.S., and among European governments over the crisis response, the eight leading industrial economies concurred at President Barack Obama’s retreat outside Washington “that the right measures are not the same for each of us.”

Worst Market Since Reagan Greets Obama Before Election (Source: Bloomberg)
With only six months before the election, the stock market is giving President Barack Obama the worst returns since Ronald Reagan was seeking a second term. The Standard & Poor’s 500 Index (SPX) is up 1.3 percent since Mitt Romney’s campaign began 12 months ago, compared with average gains of 12 percent for incumbents who won re-election starting with Harry S. Truman, according to data compiled by Bloomberg. Stocks are also advancing less than the 7 percent minimum enjoyed by George H.W. Bush, Jimmy Carter and Gerald Ford, who lost their bids for a second term. The only one with a worse equity performance heading into the vote was Reagan.
Weakening equity markets after a three-year rally underscore the challenge faced by Obama, who took office during the worst recession in seven decades and has presided over 11 quarters of growth. While share returns do little to foretell presidential contests, the 8.7 percent decline in the S&P 500 since April 2 may be a sign investors are losing confidence in an accelerating recovery even as they anticipate more central bank spending to stimulate the economy. “Fiscal policy is maxed out,” Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., said in a telephone interview on May 16. His firm oversees $643.3 billion. “In past years, we actually had the budget to be able to do it. We had the economic growth that generated tax revenues to be able to support any kind of fiscal policy. There was a lot more flexibility in enacting fiscal policy in prior years.”

Stocks Advance With Commodities While Dollar, Yen Weaken (Source: Bloomberg)
Global stocks rebounded from the worst week since September and commodities snapped a three-day drop as China signaled it would support the economy and German and French officials said they would work to keep Greece in the euro. The yen and dollar weakened against most major peers. The Standard & Poor’s 500 Index climbed the most in two months, surging 1.6 percent to 1,315.99 at 4 p.m. as takeover news also boosted stocks. Facebook (FB) Inc. tumbled below its $38 offering price. Ten-year Treasury yields added two basis points to 1.74 percent. The yen weakened against 15 of 16 major peers, while the dollar declined against 14. The S&P GSCI Index of 24 raw materials rebounded from its 2012 low, with oil up 1.2 percent to $92.57 a barrel and copper climbing 1 percent.
Concern Greece will exit the euro has erased about $4 trillion from global stock markets this month. China should adopt a “proactive fiscal policy and a prudent monetary policy” to bolster the economy, Premier Wen Jiabao said over the weekend. Germany will consider ways to spur European economic growth and do “everything necessary” to keep Greece in Europe’s currency union, German finance chief Wolfgang Schaeuble said after meeting with France’s Pierre Moscovici. “Equity prices have gotten oversold,” said Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion. “A more positive tone regarding efforts to put together some growth- related initiatives in Europe is enough to give investors a pause from the selling pressure. In addition, any kind of talk about recognizing China’s slowdown that could lead to stimulus would be good for global activity.”

Treasuries 10-Year Yield Close to Low Amid Europe Talks (Source: Bloomberg)
Treasury 10-year note yields traded at almost record lows as German and French finance ministers met to discuss strategy amid the Greek electoral impasse that has worsened the European debt crisis. U.S. 30-year bond yields closed near the lowest since December as the Federal Reserve purchased $1.8 billion of longer-term Treasuries. U.S. debt fell earlier on speculation record-low yields may limit demand as the government auctions $99 billion of coupon-bearing debt this week. The difference between the yields on the 10-year and 30-year securities narrowed to the least since January on reduced concern inflation will erode the value of fixed-income assets. “There continues to be demand for the long end,” said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “The market has been able to improve on the day. The persistent flight to quality demand will support this week’s auctions.”
The 10-year yield rose two basis points, or 0.02 percentage point, to 1.74 percent at 4:59 p.m. in New York, Bloomberg Bond Trader prices show. The 1.75 percent note due in May 2022 fell 5/32, or $1.56 per $1,000 face amount, to 100 2/32. The yield added as much as five basis points earlier and reached a record 1.67 percent on Sept. 23.

Dollar Bond Sales Stall in Asia as Costs Soar on Debt Crisis (Source: Bloomberg)
Asian companies and sovereigns sold no dollar-denominated bonds last week for the first time since January after yields surged on the deepening debt crisis in Europe and slowing industrial output in China. China Petrochemical Corp., the refiner known as Sinopec Group, sold the last securities in the U.S. currency on May 10, before the slowest week since the Lunar New Year holidays in January, according to data compiled by Bloomberg. While yields on U.S. Treasuries dropped to near record lows, average yields on Asian corporate debt have surged 24 basis points to 5.31 percent, the biggest weekly gain since the period ending Oct. 7, Bank of America Merrill Lynch indexes show. Funding costs increased an average 10 basis points to 3.42 percent globally in the same period, the indexes show.
Asian companies with the equivalent of $326 billion of debt maturing this year must refinance as the crisis in Europe deepens, with Greece facing new elections and Spain trying to boost confidence in its banks after taking over Bankia SA. German and French leaders will meet this week to map out a revised plan for the euro after Group of Eight meetings exposed disagreements on a rescue strategy. “The market is increasingly nervous so more and more people are trying to get out and that’s starting to push down pricing,” said Endre Pedersen, a managing director in the fixed income team at Manulife Asset Management in Hong Kong. “Everyone is watching what’s playing out in Greece and Spain.”

FOREX-Euro gets respite, but stays under pressure
LONDON, May 21 (Reuters) - The euro traded firm above recent four-month low as some investors who had bet on the currency falling booked profits, but deep-seated concerns about financial turmoil in Greece and Spain will keep it under pressure.
"That 2012 low is still the target and the euro would need a catalyst for that. That could come if the informal (EU) leaders' meeting this week offers no consensus (on tackling the euro zone debt crisis)."

Yen Drops Versus Peers on Prospects BOJ to Add Stimulus (Source: Bloomberg)
The yen declined against most of its major counterparts on speculation the Bank of Japan (8301) will add to stimulus measures this week to support growth and weaken the nation’s foreign-exchange rates. The euro erased losses against the dollar as German Finance Minister Wolfgang Schaeuble said Germany and France will do “everything necessary” to keep Greece in the shared currency. Brazil’s real sank as Finance Minister Guido Mantega said a weaker currency is helping to reignite the economy. India’s rupee plunged to a record against the dollar, spurring the central bank to impose curbs on trading in the foreign-currency futures market. “If they do surprise and expand their asset-purchase program again, I think that the reaction will be relatively subdued and short lasting,” Andrew Cox, a currency strategist at Citigroup Inc. in New York, said of Japan’s central bank. “The broad expectation is for an unchanged policy stance from the BOJ this week.”
The yen fell 0.7 percent to 101.65 per euro at 5 p.m. in New York after dropping 0.3 percent on May 18. Japan’s currency declined 0.4 percent to 79.31 per dollar. The euro rose 0.3 percent to $1.2818 after earlier depreciating more than 0.4 percent. It slid 1.1 percent last week and reached $1.2642 on May 18, the least since Jan. 16.

End of Extended Benefits May Lower U.S. Jobless Rate: Economy (Source: Bloomberg)
The declining U.S. jobless rate may soon get another push downward as Americans lose extended unemployment benefits. From April 7 through May 12, about 370,000 Americans in 23 states stopped getting the benefits, which provide payments for as long as 99 weeks, according to estimates from the National Employment Law Project. People in the remaining six states and the District of Columbia who still qualify may lose eligibility by September, bringing the program to an end, the report showed. Some recipients who lose their benefits may decide to accept jobs they view as less than ideal. Others may give up looking for work and drop out of the labor force, eliminating them from the ranks of the jobless. Those outcomes may trim the unemployment rate by 0.1 percentage point to 0.2 point in the next few months, according to economists Dean Maki at Barclays and Michael Feroli at JPMorgan Chase & Co.
“The unemployment rate would be the place where the effect is likely to show up most,” said Maki, chief U.S. economist at Barclays in New York and a former economist at the Federal Reserve. “It may put some modest downward pressure” on the jobless rate. People may also curtail their spending once they lose this source of income, resulting in slower economic growth that weighs on hiring. Taking these people into account, Maki estimates the drop in unemployment may be closer to 0.1 point. Those continuing to search for a job after payments expire will still be counted among the unemployed.

Fed More Bullish Than Wall Street Forecasting Growth (Source: Bloomberg)
Stephen Stanley, chief economist at Pierpont Securities LLC, has derided the Federal Reserve for downplaying improvement in the U.S. economy. Yet his 2.6 percent forecast for growth this year is below the midpoint in the central bank’s projection of 2.4 percent to 2.9 percent. Stanley’s not alone: The median of 55 estimates compiled this month by Blue Chip Economic Indicators for 2012 is 2.3 percent. All but 16 of the predictions were below the bottom of the Fed’s so-called central tendency. JPMorgan Chase & Co.’s Michael Feroli, John Lonski of Moody’s Capital Markets Group and Wells Fargo Securities LLC’s John Silvia all are relatively more cautious on growth than the policy makers.
The disconnect between the Fed’s optimistic forecast for expansion and its more bearish expectations for the labor market and inflation have made it difficult to predict the course of monetary policy, according to Stanley, who said he’s underestimated central bankers’ emphasis on their goal of full employment. The Fed last month reiterated its plan to keep borrowing costs “exceptionally low” through at least late 2014, in part to bring down “elevated” joblessness. “I’ve been banging my head against the wall,” said Stanley in Stamford, Connecticut, a former researcher at the Federal Reserve Bank of Richmond, who had predicted an interest- rate increase as early as last year and now says the Fed probably will tighten in the middle of next year. “They’re willing to let things run for longer and let inflation accelerate more than historically.”

TIPS Give Bernanke Green Light to Ease Amid Record Yields (Source: Bloomberg)
Bond traders are cutting expectations for U.S. inflation by the most since December, providing Federal Reserve Chairman Ben S. Bernanke the scope for additional stimulus as the central bank’s current effort winds down. With six weeks left before the end of the Fed’s $400 billion swap of short-term debt for longer-term securities in a program known as Operation Twist, everything from yields on securities that protect against rising consumer prices to a measure of the outlook for inflation in the forwards market show diminished concerns. Traders are pricing in a 55 percent chance that the central bank will begin new efforts to spur economic growth, Bank of America Corp. says. Speculation has risen that the central bank may need to add to the $12.8 trillion already spent to avert a second recession in three years after reports showed jobs are growing more slowly than forecast and Bernanke said April 25 that the Fed remains “prepared to do more as needed.”
For first time since it announced Operation Twist in September, the Fed’s preferred gauge of measuring traders’ inflation expectations is poised to fall for a second straight month. “It’s not only a weak economy, but as inflation comes down, it could be another reason for the Fed to implement some more stimulus,” said Gary Pollack, head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit in New York, which manages $12 billion, in a May 14 interview.

JPMorgan Europe Home-Loan Debt Raises Anxiety: Mortgages (Source: Bloomberg)
JPMorgan Chase & Co. (JPM)’s holdings of home-loan bonds from outside the U.S. soared 35-fold in the past three years. Now, with its chief investment office facing scrutiny after a $2 billion trading loss, investors are raising concern the European market’s biggest buyer will pull back. The largest U.S. bank by assets accelerated its purchases last quarter, adding $8.5 billion to lift its total to $74.5 billion, according to regulatory filings. The New York-based company’s investments approached 9 percent of the size of the Dutch and U.K. mortgage-bond markets it’s been focusing on. If they stop buying, it would be pretty bad as they are one of the major buyers at the moment,” said Frank Erik Meijer, head of asset-backed securities at The Hague-based Aegon Asset Management, which manages 220 billion euros ($280 billion). “If they need to sell, that would certainly give rise to quite some” increases in yields relative to benchmark rates.
JPMorgan bolstered prices and issuance when Europe’s lenders were forced to shrink and other potential buyers shunned asset-backed notes after U.S. subprime mortgage debt sparked a global credit crisis, according to six people at banks and investment firms active in the home-loan bond market who declined to be identified because they were speaking about a competitor. Chief Executive Officer Jamie Dimon, 56, last month described the securities as part of the chief investment office’s “very conservative” holdings, four weeks before announcing an unrelated $2 billion derivative loss that highlighted the division’s influence in certain credit markets.

Stockton Creditors Extend Talks to Avert Bankruptcy (Source: Bloomberg)
Stockton, the California city on the brink of bankruptcy, and creditors agreed to extend talks aimed at restructuring its municipal debt for an extra 30 days. The bargaining was set to end after 60 days under a California state law. The extension will give negotiators until June 25 to reach agreement, the city said today in a statement. “This is a good sign,” Stockton Mayor Ann Johnston said in the statement. “It means that our creditors understand our fiscal circumstances and it indicates that they believe that it is worth the investment of time and resources to work toward a solution.”
The community of about 292,000 residents 80 miles (130 kilometers) east of San Francisco is trying to avoid becoming the largest U.S. city to enter bankruptcy after mounting retiree health-care costs, the recession and accounting errors left it almost insolvent. The City Council in February agreed to pursue the negotiations with creditors, which include the California Public Employees’ Retirement System, the largest U.S. pension, and San Francisco-based Wells Fargo & Co. (WFC), the nation’s largest home lender.

Hong Kong’s Most-Popular IPOs Return the Least: Chart of the Day (Source: Bloomberg)
Hong Kong’s most-popular initial public offerings among retail investors since the start of 2010 have plunged an average of 54 percent from their offer price and trail returns of the city’s IPOs. The CHART OF THE DAY shows the 54 percent slump by the 10 companies with the most orders from individuals relative to stock available, against an average 7 percent drop by the 10 most-undersubscribed IPOs and a 13 percent decline for all 186 companies completing Hong Kong IPOs. The data, showing returns through May 18, are compiled by Bloomberg and Computershare Hong Kong Investor Services Ltd. By contrast, the 435 IPOs in the U.S. generated a loss of 5 percent in the same period. “Retail investors are easily driven by market sentiment and may crowd into over-priced deals if recent IPOs have been profitable,” said Pamela Chung, managing director of Computershare, a share registry that handled IPO applications accounting for 90 percent of Hong Kong’s deal flow in the last three years.
“They may stay away from good deals if people recently got burned.” Milan Station Holdings Ltd. (1180)’s May 2011 share sale drew the highest IPO subscription rate in Hong Kong’s history, five weeks after the benchmark Hang Seng Index rose to a two-month high. The retailer of used handbags lured orders from individuals worth about HK$59 billion ($7.6 billion), or 2,180 times the HK$27 million of shares available, the data show. Shares in the company, which issued a profit warning last month, plunged 54 percent since their debut through last week. Citic Securities Co. (6030), the biggest Chinese brokerage, is the best performer among the 10 deals that drew the lightest demand from individuals. The company received orders covering just 9 percent of the HK$660 million of stock available to retail investors. The stock has rallied 13 percent since its Oct. 6 debut, which was two days after the Hang Seng fell to its lowest level in more than two years.

Koreans Need to Recoup Woori Funds Soon, Regulator Says (Source: Bloomberg)
More than 10 years after South Korea spent $11 billion bailing out its weakest banks, taxpayers are still waiting to get their money back. It’s time to fix that, says Kim Seok Dong, the nation’s top financial regulator. The government needs to push ahead with its third attempt to cut its 57 percent stake in Woori (053000) Finance Holdings Co., the company created in 2001 by combining the failing banks, as quickly as possible to recoup that money and arrest its eroding value, said Kim, who is chairman of Korea’s Financial Services Commission and the official in charge of the sale. The latest plan to sell at least 30 percent of Seoul-based Woori -- a stake that’s currently worth about $2.1 billion -- is more likely to succeed as its operations have improved and Korea’s financial markets have stabilized, Kim said. Buyers face a July 27 deadline for preliminary bids. The market value has dropped 35 percent since before the first attempt in 2010.

Vietnam Economic Slowdown Seen in Cobweb-Covered Crates (Source: Bloomberg)
Nguyen Thi Ha sighs as she looks at the dust and cobwebs covering crates full of colorful, enameled tiles in her factory by Hanoi’s Red River. “We’re struggling to keep our business alive,” said Ha, who laid off more than half of her 60 employees this year as luxury hotels in the beach resort of Danang halted orders. “If the situation doesn’t improve, it will be hard for us to hold out beyond this year.” Ha’s factory is among thousands in Vietnam that cut production or closed this year after policy makers curbed a lending spree and bad debts mounted. As demand also slows from Europe to China, the shakeout of businesses that mushroomed during the 2002-2007 boom is slowing economic growth and may temper a stocks rally that made Vietnam the world’s third-best performer this year.
“There’s no way we can meet the economic growth target of 6 percent this year when so many companies are in serious trouble,” said Le Dang Doanh, an economist who has advised Prime Minister Nguyen Tan Dung and who estimates 2012 expansion may slow to as low as 5 percent, the least since 1999. “Many businesses are on their last breath.”

King’s Crisis Response to Face Scrutiny After U.K. Lawmaker Push (Source: Bloomberg)
Bank of England Governor Mervyn King’s response to the financial crisis will be scrutinized after lawmakers pushed for an inquiry as the central bank prepares to take over financial regulation. The Court, the Bank of England’s governing body, ordered a review of some central bank actions, including its conduct after the collapse of Lehman Brothers Holdings Inc. The investigation will cover the Emergency Liquidity Assistance program in 2008 and 2009, the framework for providing liquidity to banks, and the Monetary Policy Committee’s forecasting capability, the Court in London said yesterday. The move follows a push by a cross-party committee of lawmakers for an examination of the central bank’s performance as Parliament debates a bill to give it new powers. While King told the panel in January that reviews have been carried out of all the Bank of England’s responsibilities, he said last month he would “welcome” another one if it was deemed necessary.
“It didn’t seem reasonable that we’ve had a massive financial crisis that required the bank to respond across a number of fronts, and that its decisions and decision-making process shouldn’t be reviewed in some independent way,” said David Tinsley, an economist at BNP Paribas SA in London and a former central bank official. “Critics of the bank will say this isn’t enough.”

London Home Prices May Reach New Record on Haven Status: Economy (Source: Bloomberg)
London house values rose to a record this month and the city’s property market may be further boosted as investors seek a haven from the euro-area debt crisis, according to Rightmove Plc. (RMV) The average asking price in the U.K. capital rose 0.9 percent from April to 469,314 pounds ($742,500), the most since the operator of Britain’s biggest property website started keeping the data in 2002, it said today. Nationally, values were unchanged in May from the previous month. “The Greek situation means that other countries may well be undermined and you might get a domino effect of people looking to actually put their cash into a safe haven,” Rightmove commercial director Miles Shipside said on Bloomberg Television. “Obviously, as the euro depreciates, the U.K. gets slightly more expensive, but perhaps it’s a better option than what’s facing them in their own countries.”
The pound and U.K. government bonds are already benefiting from haven status as turmoil in Europe threatens to force Greece out of the euro area and engulf Spain. The pound has gained 3.2 percent this year, the most among 10 developed-market peers, data compiled by Bloomberg show, while the yield on the 10-year gilt is close to a record low.

Schaeuble Seeks Crisis Resolution With France’s Moscovici (Source: Bloomberg)
German and French leaders meet this week to map out a revised plan for the euro as the Group of Eight exposed disagreement on a rescue strategy, Greece lurched toward a possible exit and Spain’s budget deficit widened. German Finance Minister Wolfgang Schaeuble will for the first time discuss the 17-nation currency with his newly installed French counterpart, Pierre Moscovici, in Berlin today as European Union leaders prepare for a summit meeting in Brussels on May 23. After three shorter meetings in the last week, Chancellor Angela Merkel and French President Francois Hollande will seek to balance France’s desire to jump-start growth with Germany’s preference for spending cuts. “We’re all very pleased that France wants to offer new initiatives with its newly elected president,” Schaeuble told the Bild am Sonntag newspaper in an interview yesterday. “The German government is ready to talk about anything,” Schaeuble said, though he ruled out measures that would raise debt.
G-8 leaders on May 19 urged Greece to stay within the euro area as polls in the country showed a close race between parties supporting and opposing the EU’s bailout deal. The country is preparing for June 17 elections, following an inconclusive May 6 ballot. Spain revised its 2011 deficit upward -- even as its borrowing costs approached levels that prompted bailouts in Greece, Ireland and Portugal.

South Africa Approves $3.4 Billion Renewable Power Plan (Source: Bloomberg)
South Africa approved 19 wind, solar and hydropower proposals in a second bidding round, increasing the cost of renewable-energy projects given the go-ahead to 73 billion rand ($8.8 billion) as the nation boosts cleaner energy. The Department of Energy got 79 bids for 3,255 megawatts in the round and 51 met the qualification criteria, Minister Dipuo Peters said in Pretoria today. Among the winners were Tata Power Co. and Exxaro Resources Ltd. (EXX)’s Cennergi venture, as well as a group including Acciona SA and Aveng Ltd. Total capacity on offer in the round was 1,275 megawatts, Peters said. That on top of the 1,416 megawatts, costing 45 billion rand, approved in the first round in December. South Africa said in August it would add 3,725 megawatts by the end of 2016. It is expanding capacity after state-run Eskom Holdings SOC Ltd., which generates most of its power from coal, suffered shortages in 2008, leading to mines closing. The whole program will cost an estimated 100 billion rand, Peters said.
Sishen Solar, Solar Capital De Aar 3, Dreunberg, Gouda Wind, West Coast 1 and Grassridge are also among the winners. Proposed costs in the second-round fell and the proportion of equipment and services sourced locally rose as bids became more competitive, Energy Department Director-General Nelisiwe Magubane said. The average cost for solar photovoltaic plants slid to 1,645 rand a megawatt-hour from 2,758 rand, a copy of a presentation handed to reporters in Pretoria showed.

20120522 1019 Global Commodities Related News.

Investors Least Bullish in 2012 as Crisis Escalates: Commodities (Source: Bloomberg)
Hedge funds reduced wagers on a rally in commodities to the lowest this year on mounting speculation that Greece will leave the euro, slowing global growth and curbing demand for everything from copper to soybeans. Money managers reduced net-long positions across 18 U.S. futures and options by 15 percent to 616,841 contracts in the week ended May 15, the lowest since Dec. 27, Commodity Futures Trading Commission data show. Gold bets fell for a second week and to the lowest since December 2008, while copper holdings tumbled 69 percent, the most in five weeks. Cotton wagers dropped to the lowest in five years.
About $4 trillion was erased from the value of global equity markets this month as Europe’s debt crisis escalated. Moody’s Investors Service lowered debt ratings on 16 Spanish banks on May 17, while Fitch Ratings cut Greece’s credit rating on concern that the country may be the first to exit the 17- nation currency bloc. Home prices in China, the biggest metals consumer, fell in a record number of cities last month, government data showed. “The outlook for commodities is not good,” said Eric Sprott, who runs Toronto-based Sprott Asset Management LP, which manages $9 billion of assets. “The world economies are slowing down. China’s growth rate is softening, and it’s not even debatable whether there will be a recession in Europe.”

Grain-Pit Traders Squeezed Out as CME Expands to Match ICE Hours (Source: Bloomberg)
CME Group Inc. (CME), the world’s largest futures exchange, extended grain-trading hours today in response to the threat of competitors seeking a share of the electronic transactions that now dominate the market. Access to the CME’s Chicago Board of Trade, which first offered corn futures in 1877, is rising to 21 hours a day from 17, a week after the 12-year-old IntercontinentalExchange Inc. (ICE), or ICE, introduced a 22-hour session and its first-ever grain contracts. The Kansas City Board of Trade and Minneapolis Grain Exchange also start expanded hours today. While CBOT corn, wheat and soybean trading rose more than 15 percent to 182.8 million contracts last year, 93 percent of the volume was electronic rather than through open outcry in its Chicago trading pits, exchange data show. That compares with 63 percent in 2007. ICE had sought to lure speculators by allowing transactions to continue when market-moving U.S. government crop reports are issued and CBOT markets were closed.
“The electronic platform is a big, giant liquidity pool that is sometimes an inch deep and other times a mile deep,” said Douglas Carper, the principal of Omaha, Nebraska-based DEC Capital Inc., a commodity trading adviser and hedge-fund consultant. “Grains will become more or less an institutional and professional market, just like it is already in stocks, foreign exchange and global bond markets.”

Wheat Slips as Rainfall May East Concerns Over Drought (Source: Bloomberg)
Wheat futures fell for the first time in six sessions in Chicago after climbing to the highest price in more than eight months in earlier trading, as rain in Ukraine and Russia may relieve drought concerns. July-delivery wheat fell as much as 1.8 percent to $6.8275 a bushel on the Chicago Board of Trade and was at $6.8725 at 12:40 p.m. Paris time. The contract earlier rose as high as $7.22 a bushel, the highest level for the most active contract since Sept. 13. Wheat futures jumped 16 percent last week, the most since the five days ended June 15, 2007, as dry weather threatened to damage crops in the U.S. and Russia, two of the world’s three biggest shippers this year. Russia and Ukraine will get showers today and tomorrow, AccuWeather forecast.
“In the past days, numerous regions in Ukraine benefited from scattered showers,” Paris-based farm adviser Agritel wrote in a market report today. “These rains should continue in the coming days and even reach the regions of southwest Russia, where the production potential so worries the operators.”

Market Recap: Wheat Futures (Source: CME)
Wheat futures posted slight gains at all three exchanges today. Futures finished mid-range as intra-day profit-taking pulled futures well off session highs. Funds bought 8,000 contracts (40 million bu.) of Chicago wheat today. Wheat futures were supported today by concerns hot and dry conditions are taking a toll on winter wheat in the Plains and southern Midwest.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 4 at 699 1/4, 22 3/4 off the high and 16 1/2 up from the low. December Wheat closed up 5 1/4 at 725 1/4. This was 21 1/2 up from the low and 20 1/4 off the high. July wheat closed higher for the sixth session in a row but well off of the early peak at 722. July KC wheat also closed sharply higher on the session and has gained as much as $1.20 1/2 off of last Monday's lows. A continued threatening weather forecast for Russia plus a hot and dry trend for Kansas for the next week or more has helped to support the solid gains. Traders see the weekly crop updates this afternoon to show a drop of 2-3% in the good to excellent ratings for the winter wheat crop from 60% last week. Weekly export inspections came in at 24.89 million bushels which was right on expectations and compares with 18.3 million necessary each week to reach the USDA forecast. Paris milling wheat pushed to the highest level since June of 2011 and this added to the positive tone. Private exporters reported a sale of 100,000 tonnes of US hard red winter wheat to Iraq for the new marketing year. July Oats closed up 2 1/2 at 342 1/2. This was 3 3/4 up from the low and 1 1/4 off the high.

Market Recap: Corn Futures (Source: CME)
Corn futures were choppy with a slight upside bias for much of the day. Most contracts except July corn posted slight gains, but finished in the lower end of today's range. Dryness concerns in the Corn Belt underpinned strength in the corn market today as last week was warm and dry and more of the same is expected this week. While these conditions are favorable for planting, they are a concern for crop development. But softer Gulf basis levels and expectations for a big 2012-13 crop led to a mixed finish.

Corn Market Recap for 5/21/2012 (Source: CME)
July Corn finished down 6 at 629 1/2, 15 off the high and 3/4 up from the low. December Corn closed up 2 at 539. This was 4 1/4 up from the low and 10 1/2 off the high. December corn has closed higher for six sessions in a row and traded as high as 549 1/2 after a low of 499 on May 11th. Much warmer and drier than normal conditions of the past week plus a continued dry and warm pattern for much of the next two weeks for parts of the Midwest has helped to support active buying from funds and speculators. For this afternoon's 1st crop conditions weekly update of the year, traders see corn rated near 70% good to excellent from 63% last year. Weekly export inspections came in at 23.3 million bushels which was a bit below expectations and compares with 35.3 million necessary each week to reach the USDA forecast. July corn was trading lower on the session into the pit close after first trading to the highest level since April 10th. July Rice finished up 0.255 at 15.43, equal to the high and equal to the low.

GRAINS-US wheat hits near 9-month top on supply concerns
SYDNEY/SINGAPORE, May 21 (Reuters) - U.S. wheat rose as much as 3.8 percent  to its highest in nearly nine months, adding to last week's steep gains, as dry weather stoked fears about production losses in top exporters the United States and Russia.
"Today's gains are a continuation of last week, and the theme remains consistent, that is, significant speculative short covering, which appears to be induced by a series of less than ideal weather," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.

Ukraine sees a sharp fall in 2012 wheat harvest
KIEV, May 21 (Reuters) - Poor weather is likely to slash Ukraine's 2012 winter grain harvest to 14 million tonnes, including no more than 12 million tonnes of wheat, from 23 million in 2011, a senior weather forecaster said on Monday.
"We see the harvest of 10 to 12 million tonnes of wheat in 2012 and this figure will not be revised significantly," Tetyana Adamenko, head of the agricultural department of Ukraine's meteorological service, told Reuters.

German wheat sowings for 2012 crop cut by frost
HAMBURG, May 21 (Reuters) - Germany will harvest 2.870 million hectares of winter wheat in summer 2012, down 9.5 percent on the year after heavy frosts damaged sowings, Germany's statistics office said on Monday.
Its plantings estimate for the 2012 harvest also reduced rapeseed sowings by 0.5 percent on the year to 1.321 million hectares.

Fast planting prompts corn sales by funds
May 18 (Reuters) - Large speculators cut their net long position in Chicago Board of Trade corn futures and options to the smallest level since July 2010 as timely planting of the U.S. crop this spring raised prospects for a large harvest in the autumn, regulatory data released on Friday showed.
The Commodities Futures Trading Commission's weekly commitments-of-traders report also showed that noncommercial traders, a category that includes hedge funds, cut their bullish bet on soybeans for the second straight week in the five trading days ended May 15.

US agriculture companies set millions for Africa
May 18 (Reuters) - A group of U.S. seed, chemical and equipment companies will invest at least $150 million over the next few years into African agricultural projects and products, the companies said on Fri day.
The investments pledged by DuPont , Monsanto , Cargill and others are part of an overall $3 billion effort by companies around the world announced by President Barack Obama.

India considers wheat exports to Iran - govt source
NEW DELHI, May 18 (Reuters) - India is considering wheat exports to Iran, a government source said on Friday, as New Delhi hopes to boost exports to the sanctions-hit nation to help settle part of its oil imports bill through a bilateral mechanism.
An Iranian trade delegation will come to India next week to discuss wheat exports, the source added, without elaborating on the likely payment mechanism for sales to Iran.

Italy wheat, maize imports fell in Jan-Feb - Anacer
MILAN, May 18 (Reuters) - Imports of wheat and maize into Italy, a major grain buyer in Europe, fell sharply in the first two months of this year compared to the same period of 2011 when they jumped, Italian cereals body Anacer said on Friday.
Imports of soft wheat rose 17 percent to 689,270 tonnes in the January-February period of 2012 while maize imports dropped 29 percent to 387,632 tonnes and imports of durum wheat used for making pasta fell to 196,165 tonnes from 366,024 tonnes, Anacer said in a statement.

SOFTS-Robusta coffee hits 8-1/2 month high, sugar up
LONDON, May 21 (Reuters) - Robusta coffee futures on Liffe hit an 8-1/2 month high in early trade  while arabica coffee and raw sugar on ICE also advanced, tracking a broad-based rise in crude oil and many other commodity markets.
Kraft Foods  said on Friday it lowered prices on many of its U.S. coffees, including its flagship brand Maxwell House, citing lower green coffee costs since prices peaked last year, making it the second major U.S. roaster to lower its coffee prices this week.

India coffee rises on strong demand
MUMBAI, May 18 (Reuters) - Coffee prices in India rose in the auction held on Thursday on strong demand from exporters and local traders, while a few varieties saw selective trade, auctioneer J Thomas & Co said in a statement on Friday.
Robusta parchment coffee was in much demand from exporters while robusta cherry variety was bought by roasters, the statement said.      

Brazil sugar output gap filled by other origins
LONDON, May 18 (Reuters) - Brazil's faltering sugar output has created a supply gap that is being filled by alternative origins, triggering uncertainty for refiners who would normally use the Brazilian sweetener, commodities house Czarnikow said on Friday.
Brazil's center-south 2012/13 sugarcane harvest is struggling to expand this year after disappointing output in the 2011/12 season, which was caused by a mixture of bad weather and overdue replanting of ageing cane plants.

Fonterra Cuts Milk Payout Forecast on Global Price Slump (Source: Bloomberg)
Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, expects to pay its farmer suppliers 9 percent less next year as prices fall to the lowest in more than two years on surging global production. The company will pay its 11,000 farmer shareholders NZ$5.50 ($4.22) a kilogram of milk solids in the year ending May 31, 2013, Auckland-based Fonterra said in a statement. That compares with the current year’s payout, which was today cut by 30 cents to NZ$6.05 a kilogram. Whole-milk powder slumped 30 percent this year at the company’s GlobalDairyTrade auctions after mild weather and record prices spurred farmers to boost output. That helped push global food costs lower for the first time this year in April, with dairy prices dropping to the cheapest since October 2009, according to the United Nations’ Food & Agriculture Organization. New Zealand’s dollar weakened to a five-month low in May as powder prices fell to the lowest since August 2009.
“There’s a lot of milk out there and prices have softened,” Chairman Henry van der Heyden said in the statement. “Supply and demand should move more into balance later in 2012 which may help ease the downward pressure on prices.”

New facilities spotlight next-generation biofuels
May 18 (Reuters) - After a decade of promise, advanced biofuels makers are entering a crucial make-or-break period with the first of a new generation of production facilities about to come on line.  
The new facilities are designed to take biofuels beyond corn-based ethanol and begin to shift the industry to "advanced" fuels made with a lower carbon footprint derived from products that will not compete with demand for food.

U.S. Won’t Ease Oil Sanctions at Iran Nuclear Talks (Source: Bloomberg)
Negotiators headed to Baghdad for a second round of talks on Iran’s nuclear program won’t be giving Iran the relief it’s seeking from oil and financial sanctions, according to Obama administration officials and Western diplomats. At the same time, the U.S. and the five other major powers that will participate in talks with Iran on May 23 -- the U.K., France, Germany, China and Russia -- have agreed on confidence- building measures they may offer in response to Iranian concessions, said several U.S. officials and Western diplomats who spoke on condition of anonymity because of the sensitivity of the issue. U.S. and European Union sanctions aimed at the No. 2 producer in the Organization of Petroleum Exporting Countries are crippling Iran’s ability to export and get paid for crude oil, its leading revenue source. The U.S. and EU are in no hurry to ease the pressure before a deal is done, Obama administration officials and Western diplomats said.
The six nations are willing to offer something: assistance to Iran’s civilian nuclear program and an easing of restrictions that have blocked Iran from getting spare parts for civilian aircraft, four U.S. officials said.

OIL-Brent rises toward $108, China stimulus hopes aid
SINGAPORE, May 21 (Reuters) - Brent crude rose towards $108 per barrel, recovering from a 2012 low, on hopes China could take steps to stimulate growth and lift fuel demand at the world's second largest oil user, although concerns about the euro zone crisis capped gains.
"We believe that the extent of recent sell-off was largely unwarranted," Goldman Sachs analysts said in a May 18 note, pointing to better oil demand and tighter crude supply.

China's Iran oil imports rebound on month, down on year
BEIJING, May 21 (Reuters) - China's crude oil imports from Iran rebounded more than 50 percent in April from March after resolving pricing disputes over term contracts, but shipments fell nearly a quarter from a year ago, with Saudi Arabian supplies helping to plug the gap.  
China and India are under Western pressure to cut purchases, since the actions of the world's top buyers of Iranian oil will determine the success of a strategy aimed at crimping Iran's oil revenue to halt Tehran's controversial nuclear programme.

China April gasoline exports at 140,000 tonnes - CCS
BEIJING, May 21 (Reuters) - China's gasoline exports stood at 140,000 tonnes in April and outbound shipments in the first four months declined 36.4 percent from a year earlier to 1.15 million tonnes, data from the China Customs Statistics Information Centre (CCS) showed on Monday.
The world's second-largest oil consumer also exported 80,000 tonnes of diesel last month, while importing 40,000 tonnes of the fuel.

Oman sees oil output rising to 915,000 bpd in 2012
BUBAI, May 20 (Reuters) - Small non-OPEC producer Oman expects to raise its average oil and condensate production to 915,000 barrels per day (bpd) in 2012, up from the 885,000 bpd last year, the oil ministry said on Sunday.
Based on an average price of $102.9 per barrel that Oman sold its oil for last year, the additional 30,000 bpd could increase the sultanate's oil revenues by around $1.13 billion this year, assuming all the additional production is exported.

Japan's Fuji Oil sees 2012/13 crude refining up 8 pct
TOKYO, May 21 (Reuters) - Japan's AOC Holdings  said its Fuji Oil unit plans to refine 8 percent more crude oil in the year to end-March 2013 than a year earlier, to meet firm demand for low-sulphur fuel oil for power generation after the March 2011 earthquake.  
The company said it plans to refine 8.228 million kilolitres  (142,000 barrels per day) of crude oil this business year.  Fuji Oil's sole Sodegaura refinery, facing Tokyo Bay, has a capacity of 143,000 barrels per day and supplies fuel oil and crude to quake-hit Tokyo Electric Power Co .

Global LNG-Asian LNG steady above $18, upside may be limited
PERTH, May 21 (Reuters) - Asian liquefied natural gas spot prices for June and July delivery remained over $18 per tonne during the past week, as demand for spot cargoes stayed high because of the nuclear crisis in Japan, the world's largest LNG importer.    
Prices for late June and July cargoes were in the low $18 per million British thermal units (mmBtu)  range, with three to four cargoes from Indonesia's Tangguh selling above $18 per mmBtu, according to market sources.

G8, raising pressure on Iran, puts oil stocks on standby
CAMP DAVID, Md., May 19 (Reuters) - Leaders of the Group of Eight major economies raised the pressure on Iran on Saturday, signaling their readiness to tap into emergency oil stockpiles quickly this summer if tougher new sanctions on Tehran threaten to strain supplies.
"We remain united in our grave concern over Iran's nuclear program," the G8 leaders said in a statement summing up the results of their meeting in Camp David in rural Maryland.

Oil Gains a Second Day as U.S. Opposes Easing of Iran Sanctions (Source: Bloomberg)
Oil rose for a second day in New York as the Obama administration said it will oppose an easing of sanctions on Iran and amid speculation the U.S. economy may improve, boosting fuel consumption. Futures gained as much as 0.5 percent. U.S. negotiators headed to Baghdad for a second round of talks tomorrow on Iran’s nuclear program won’t give the nation relief from sanctions that are hobbling its oil exports, according to officials who spoke on condition of anonymity because of the sensitivity of the issue. Existing U.S. home sales probably climbed last month, a Bloomberg News survey showed. Crude for June delivery, which expires today, advanced as much as 44 cents to $93.01 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.93 at 9:55 a.m. Sydney time. The more-actively traded July contract climbed 34 cents to $93.20. Front-month futures rose 1.2 percent yesterday, the first gain in seven days, to $92.57 and are down 6 percent this year.
Brent oil for July settlement gained $1.67, or 1.6 percent, to $108.81 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month price for the European benchmark contract closed at a premium to West Texas Intermediate of $15.95. The U.S., U.K., France, Germany, China and Russia hold talks tomorrow with Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries, as sanctions cripple its ability to export and get paid for crude. The embargo has forced the country back to negotiations and the U.S. is in no hurry to ease the pressure before a deal is done, said the officials.

20120522 1019 Soy Oil & Palm Oil Related News.

Market Recap: Soybean Futures (Source: CME)
Soybean futures posted double-digit gains in all but the front-month July contract. A friendly risk-taking environment combined with weather concerns to lift soybean futures today. The dry near-term forecast for much of the Corn Belt and South has traders concerned about the emerging soybean crop. A weaker U.S. dollar index was also positive for bean futures today.

Soybean Complex Market Recap (Source: CME)
July Soybeans finished up 4 3/4 at 1409 3/4, 13 1/4 off the high and 1 1/4 up from the low. November Soybeans closed up 15 1/2 at 1303 1/2. This was 9 1/4 up from the low and 11 1/4 off the high. July Soymeal closed down 1.7 at 416.2. This was 0.7 up from the low and 6.3 off the high. July Soybean Oil finished up 0.55 at 50.87, 0.29 off the high and 0.62 up from the low. November soybeans saw solid gains on the session as weather is beginning to become a more important force. Traders suggested that the extended forecast models are still showing a drier and warmer trend and traders are especially concerned with the areas which did not get any rains in the past week. Traders are concerned with germination and early development in some of the same areas which might go another week or more without much rain. Ideas that the market may need to add some weather premium "just in case" early June remains drier than normal has helped support the market. The surge higher in wheat and the US stock market has added to the positive tone as outside market forces were somewhat supportive. Heat and dryness in the wheat areas is also seen as a potential supportive force "if" double crop acres do not receive some good rains for planting and this added to the positive tone. For this afternoon's weekly update, traders see soybean planted area near 68% complete from 46% last week. Weekly export inspections came in at 12.68 million bushels which was below expectations and compares with 11.9 million necessary each week to reach the USDA forecast. Traders will monitor the topsoil issues in some state reports tonight.

VEGOILS-Palm oil rises on exports, Europe woes weigh
SINGAPORE, May 21 (Reuters) - Malaysian palm oil futures edged up  on improving exports although gains were capped as investors remained wary over uncertainty surrounding the euro zone.  
"Prices are poised to recover after the recent sell-off. It was oversold and a little divorced from fundamentals. Demand is creeping back and (supply) situation remains tight," said a trader with a local commodities brokerage in Malaysia.