Monday, June 11, 2012

20120611 1815 FCPO EOD Daily Chart Study.

FCPO closed : 2989, changed : +16 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histogram : recovering, seller taking profit.
Support :  2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded small gain with slowing volume participation. Soy oil price currently trading higher by more than 1% after last Friday fall substantially lower while crude oil price currently trading higher.
May Official MPOB data released today are little positive biased as lower stock, higher production and export levels while 2 cargo surveyors reported mixed export figures for the period of 1~10th this month. Broad commodities price surge higher reacted to the better than estimates China economy data.
Despite the positive news, daily chart study revised to suggesting a correction range bound downside biased market development with MACD indicator almost having a cross up.
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.

20120611 1752 FKLI EOD Daily Chart Study.

FKLI closed : 1580 changed : +6.5 point, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histogram : rising, buyer testing market.
Support : 1580, 1570, 1565, 1550 level.
Resistance : 1590, 1600, 1610, 1620 level.
Comment :
FKLI closed recorded gain with slightly better volume transacted doing 1.5 point premium compare to cash market that closed higher. Last Friday U.S. markets closed higher and today Asia markets ended higher while European markets currently recording gains.
China reported better than forecast trade data and easing inflation and news on Spain's bank bailout aid boots global markets to rally higher with France and Greece election in focus.
Technical chart analysis adjusted to calling a side way range bound little upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120611 1710 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : pullback correction downside biased.
 Hang Seng chart reading : pullback correction downside biased.
KLCI chart reading :  little upside biased testing resistance level.

20120611 1627 Global Market & Commodities Related News.

Shares, commodities and the battered euro jumped after euro zone finance ministers agreed to lend Spain up to $125 billion to shore up its struggling banks, relieving markets that had feared a fiscal collapse in the country. U.S. stock index futures pointed to steep gains looking to extend Wall Street's recent rally after euro zone finance ministers agreed on an aid package to help Spain.

The euro was poised for its biggest daily rally against the dollar in almost eight months after Spain secured help for its debt-stricken banks and as Chinese economic data was not as bad as the market had feared.

FOREX-Euro jumps above $1.26 on Spain bank relief
TOKYO, June 11 (Reuters) - The euro was poised for its biggest daily rally against the dollar in almost eight months, after Spain secured help for its debt-stricken banks and as Chinese economic data was not as bad as the market had feared.
The euro zone decided to lend its fourth-largest economy up to 100 billion euros ($125 billion) to reassure investors and prevent the threat of a bank run in case Greece's crisis heats up again after elections this coming weekend.

Chicago corn rose for a fourth straight session to trade near last week's two-week high on forecasts of dry weather in the U.S. grain-belt threatening the early planted crop as it enters the pollination phase.

CME extends open-outcry grain trading day
CME Group  said on Friday it will add 45 minutes to the open-outcry trading day for its Chicago Board of Trade grain markets, synchronizing the close with that of electronic trading following complaints from farmers and grain elevator managers.

Lanworth said to peg US corn crop at 13.645 bln bu
U.S. crop forecaster Lanworth pegged U.S. corn production at 13.645 billion bushels for the 2012/13 marketing year, down sharply from the U.S. Agriculture Department forecast last month of 14.790 billion bushels, trade sources said.

China May commodities imports beat expectations; crude at record
China's imports of key commodities in May confounded expectations of a fall, with crude oil shipments at a record high and both copper and iron ore imports unexpectedly rising more than 10 percent from a month ago, data showed on Sunday.

Thailand aims to be sugar bowl of Asia
Thailand, the world's second-biggest sugar exporter, has revised up its forecast for 2012/13 sugar production to 10.4 million tonnes and aims to produce more every year in order to supply rising consumption in Asia, a top industry official said.

Thai govt to start releasing record rice stocks
Unmilled rice stocks held by the Thai government have jumped to a record 15 million tonnes, Commerce Ministry data showed on Monday, and prices could be forced down if it starts releasing some of the grain into local and overseas markets, as planned.

Brazil rain-blighted cane harvest set for dry week
Brazil's cane harvest will see dry weather for most of next week, forecaster Somar said on Friday, helping the progress of harvesting which has been blighted by wet weather since the outset and speeding loading of sugar at the ports.

Brent crude futures rose more than $2 as a rescue package for Spain's banks revived hopes of steady oil demand growth, while a failure in nuclear talks between the United Nations and Iran renewed concern over supply disruption.

Iran feels sanctions pain as oil income slumps
Iran's state finances have come under unprecedented pressure and the resilience of ordinary people is being tested by soaring inflation as oil income plummets due to tightening Western sanctions and sharply falling oil prices.

Saudi cuts oil output in May to 9.8 mln bpd
Top oil exporter Saudi Arabia pumped 9.8 million barrels per day (bpd) of crude oil in May, cutting output by 300,000 bpd from the month before, an industry source said on Saturday.

US quarterly oil output hits highest level in 14 yrs
The oil boom in North Dakota and Texas has helped push U.S. quarterly crude output over 6 million barrels per day for the first time in 14 years, the government said on Friday.

Euro Coal-July DES offers drop $5/T in quiet trade
LONDON, June 8 (Reuters) - Offers for July delivery coal cargoes into Europe dropped sharply by $5.00 a tonne on Friday to $85.00, the two-year low reached in May, reflecting growing bearish sentiment as the market braces itself for further Chinese price re-negotiations.
Despite expectations of fresh China problems, there are markedly fewer prompt cargoes being offered bilaterally or via brokers because they have been re-sold, traders and utilities said.

China May iron ore imports at 63.84 mln T, up 10.7 pct
BEIJING, June 10 (Reuters) - China imported 63.84 million tonnes of iron ore in May, up 10.7 percent from the previous month, official data from China's customs authority showed.
Imports of steel products rose 16.8 percent to 1.32 million tonnes while exports rose 12.0 percent to 5.23 million tonnes.

Iron Ore-Shanghai rebar gains, but demand worries cap rise
SINGAPORE, June 11 (Reuters) - Shanghai steel futures edged higher, benefitting from increased appetite towards risk assets as euro zone worries eased with Europe lending to debt-stricken Spain, although concerns about sluggish Chinese steel demand limited gains.
The most active rebar contract on the Shanghai Futures Exchange  edged up 0.3 percent to 4,121 yuan ($650) a tonne by 0632 GMT, gaining far less than other Shanghai-traded commodities like copper and rubber which jumped between 2.5 and 3 percent.

Freeport Indonesia gets green light for ore exports
JAKARTA, June 11 (Reuters) - Indonesia has granted permission to Freeport McMoRan Copper & Gold Inc  to export unprocessed ore, after the government imposed new rules on mining exports, the company said on Monday.
Indonesia in May asked all miners to submit plans to build smelters to add value to the country's mining sector ahead of a 2014 ban on raw mineral exports, as well as imposing a 20 percent export duty on ore exports.

London copper futures rose almost 3 percent rebounding from last week's near six-month lows, after Europe agreed on a $125 billion bailout package for Spain's distressed banks, while surprisingly strong import data from China lent further support.

China refined copper output falls in May on plant maintenance
Production of refined copper in China fell 1.4 percent from a month earlier to a three-month low in May, with some smelters taking the chance to carry out maintenance as consumption remained sluggish, though output is expected to pick up in June.

Speculators nearly double copper shorts, boost gold
June 8 - Money managers nearly doubled their bearish copper bets in the week to June 5, turning in their largest net short holding since April 2009, as fears of a global growth slowdown dampened near-term demand prospects.
Managed money longs cut their holdings by 2,180 lots while shorts increased their bearish stance by 4,238 lots, resulting in a net short position of 6,418 lots and bringing total net shorts to 13,175 lots, according to data from the Commodity Futures Trading Commission (CFTC).

China refined copper output falls in May on plant maintenance
HONG KONG, June 11 (Reuters) - Production of refined copper in China fell 1.4 percent from a month earlier to a three-month low in May, with some smelters taking the chance to carry out maintenance as consumption remained sluggish, though output is expected to pick up in June.
Consumption in the world's top producer and consumer of refined copper has been hit a slowdown in the country's economy, while arrivals of term shipments of the metal to China stayed steady, weighing on domestic prices.

China May copper imports posts surprise 12 pct gain
BEIJING, June 10 (Reuters) - China's copper imports unexpectedly rose 11.9 percent in May from a month ago, preliminary data showed on Sunday, snapping two straight months of falls likely due to the relocation of inventories from the West to the world's top metals consumer.
The monthly rise was a surprise to traders and analysts who had expected that weak domestic demand, high stocks and strong spot prices on the London Metal Exchange would cut arrivals for a third month.

Gold inched up after rising nearly 1 percent earlier on the euro zone's decision to help Spain's battered banks, which boosted risky assets and pressured the dollar, but gold's gains were outpaced by those of precious metals with industrial uses.

METALS-Copper rebounds on Spain aid, China data
SHANGHAI/SINGAPORE, June 11 (Reuters) - London copper futures rose almost 3 percent, rebounding from last week's near six-month lows, after Europe agreed on a $125 billion bailout package for Spain's distressed banks, while surprisingly strong import data from China lent further support.
Investors trooped back into risk assets after euro zone finance ministers agreed to lend Spain up to 100 billion euros ($125 billion) for its bank rescue fund, fuelling hope that the life line would help contain Europe's major debt crisis.

PRECIOUS-Gold up after Spain deal; outpaced by other metals
SINGAPORE, June 11 (Reuters) - Gold inched up, after rising nearly 1 percent earlier on the euro zone's decision to help Spain's battered banks, which boosted risky assets and pressured the dollar, but gold's gains were outpaced by those of precious metals with industrial uses.
Silver, platinum and palladium outshone gold, with palladium leading the pack with an increase of 2.4 percent, its largest one-day rise in two months.

Increased Atlantic activity drives up Baltic index
June 8 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose on Friday as panamax vessels benefited from increased Atlantic activity.
The main index, which gauges the cost of shipping commodities including iron ore, coal and grain, gained 5 points or 0.57 percent to 877 points, after 11 straight days of declines.

20120511 1057 Global Market & Commodities Related News.

GLOBAL MARKETS-Markets buoyed by EU aid for Spanish banks
TOKYO, June 11 (Reuters) - Risk assets jumped after euro zone finance ministers agreed on loans to help Spain's battered banks, easing fears Madrid's banking woes could escalate into a bankruptcy crisis and compound the currency bloc's troubles with Greece.
"The immediate effect on financial markets should be beneficial. Equity markets especially respond well to short-term improvements, while bond markets, especially higher-quality debt, might continue to send out signals in the form of very high prices and low yields that the trouble is not over," Hastings said.

COMMODITIES-Down on day but post first weekly gain since March
NEW YORK, June 8 (Reuters) - Commodities fell broadly on demand worries linked to uncertainty over a European rescue plan for Spanish banks and Chinese economic data, but raw materials prices still finished up for the week after a sharp decline in May.
"The major issue is Spain's downgrade yesterday and whether or not they will agree to a bailout at the weekend meeting or wait until Spain completes an audit of its banking system," said Thorbjoern Jensen, oil analyst at A/S Global Risk Management.  

OIL-Crude oil rises $2 on Spain rescue, Iran
SINGAPORE, June 11 (Reuters) - Crude oil futures rose $2 in early Asian trading after euro zone finance ministers agreed to a rescue package of up to  100 billion euros ($125 billion) for Spain's banks and after talks between the United Nations and Iran failed.
The rescue package for Spain was larger than expected, calming some of the fears in financial markets over Europe's debt crisis. The aid was heralded as a milestone for the region by the Group of Seven developed nations.

Iran feels sanctions pain as oil income slumps
LONDON, June 10 (Reuters) - Iran's state finances have come under unprecedented pressure and the resilience of ordinary people is being tested by soaring inflation as oil income plummets due to tightening Western sanctions and sharply falling oil prices.
Tough financial measures imposed by Washington and Brussels have made it ever more difficult to pay for and ship oil from Iran. Its oil output has sunk to the lowest in 20 years, cutting revenue that is vital to fund a sprawling state apparatus.

China May crude oil imports up 14.5 pct from April
BEIJING, June 10 (Reuters) - China imported 25.48 million tonnes of crude oil in May, up 14.5 percent from 22.26 million tonnes in the previous month, according to data from China's General Administration of Customs.
Imports of oil products rose 14.9 percent to 3.47 million tonnes while exports of oil products rose 25.3 percent to 2.08 million tonnes.

Saudi cuts oil output in May to 9.8 mln bpd
DUBAI, June 9 (Reuters) - Top oil exporter Saudi Arabia pumped 9.8 million barrels per day (bpd) of crude oil in May, cutting output by 300,000 bpd from the month before, an industry source said on Saturday.
The Saudi kingdom's oil production was 10.1 million bpd in April, its highest for more than 30 years, as it bid to meet growing demand and curb oil prices.

NATURAL GAS-Short cover lifts US natgas futures slightly
NEW YORK, June 8 (Reuters) - U.S. natural gas futures ended with modest gains on Friday, rebounding as investors covered short positions ahead of the weekend and a day after prices slid 6 percent when a weekly government report showed a big rise in gas inventories.
"Much of the heavy lifting for the market move (lower) is done, and now we're looking at bargain hunting from the lows. Weather is slightly above normal, but not making any case for bigger support," Gelber & Associates analyst Pax Saunders said.

EURO COAL-July DES offers drop $5/T in quiet trade
LONDON, June 8 (Reuters) - Offers for July delivery coal cargoes into Europe dropped sharply by $5.00 a tonne  to $85.00, the two-year low reached in May, reflecting growing bearish sentiment as the market braces itself for further Chinese price re-negotiations.
"A month or two ago, you were being offered every kind of coal at competitive prices but now, there's not that much being offered," one utility source said.

20120611 1054 Local & Global Economy Related News.

Economy: First 2013 budget focus group to meet on June 13
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the first focus group on the 2013 Budget will meet on June 13 to discuss 16 topics including macroeconomic, sectoral and social issues. He said the discussions, themed "New Initiatives in Enhancing Private Investment" and involving representatives from business and non-governmental organisations, will centre around 84 memorandums received by the ministry on 20 macroeconomic, 49 sectoral and 15 social aspects. Ahmad Husni said the issues include boosting domestic demand through raising incomes, policy formulation, meeting the needs of target groups, enhancing the efficiency of Islamic finance, improving syariah education, strengthening social cohesion, and youths. (Bernama)

Vietnam: Central bank cuts policy rates for fourth straight month
Vietnam’s central bank cut interest rates for the fourth straight month to spur an economy that may expand at the slowest pace in more than a decade, joining policy makers from Brazil to China in countering a global slump. The central bank’s refinancing rate was cut to 11% from 12%, while the discount rate was lowered to 9% from 10%.Short-term lending rates will be capped at 13% for some sectors, and the monetary authority will cut its rate cap on dong deposits by 2 ppt to 9%. Vietnam’s inflation rate slowed to 8.34% in May from 23.02% in August 2011. (Bloomberg)

China: Trade surprise signals domestic stimulus focus
China’s exports grew in May at more than double the pace analysts estimated while industrial output and retail sales trailed forecasts, signaling last week’s cut in interest rates was aimed at countering a domestic slowdown. Overseas shipments climbed 15.3% y-o-y while Industrial output rose by less than 10% for a second month and retail sales increased the least in almost six years excluding holiday-month distortions. China’s resilience in trade indicates Europe’s debt crisis has yet to produce a collapse in world commerce on the scale of the 2008 global recession. (Bloomberg)

China: May industrial output rise 9.6%
China’s industrial output rose 9.6% in May y-o-y, compared with the median estimate of 9.8% and 9.3% growth in April. Retail sales, meanwhile, gained 13.8%. Fixed-asset investment excluding rural households rose 20.1% in the first five months of the year, compared with forecasts for a 20% gain. Retail sales growth compared with estimates of 14.2% and April’s 14.1% increase. (Bloomberg)

China: Passenger-vehicle sales rise 22.6% YoY, exceeding estimates. China's passenger-vehicle sales rose more than analysts estimated in May as purchases of Toyota Motor Corp. and Honda Motor Co. cars recovered from disruptions caused by last year's natural disasters. Deliveries, including multipurpose and sport-utility vehicles, rose to 1.28 million units last month. (Source: Bloomberg)

South Korea: Producer price inflation eases to 29-month low
South Korean producer inflation moderated to a 29-month low as meat and fish prices and some service fees declined. Prices rose 1.9% in May y-o-y, the smallest gain since December 2009, after a 2.4% increase in April. They fell 0.6% from April. Consumer inflation remained at a 21-month low of 2.5% in May. (Bloomberg)

S. Korea: BOK held off from altering borrowing costs for a 12th straight month as easing inflation gave policy makers room to wait and see how Europe's debt crisis and China's slowdown affect the economy. Governor Kim Choong Soo and his board kept the benchmark seven-day repurchase rate unchanged at 3.25%. The decision was unanimous and the board didn't discuss a possible increase or cut, Kim told reporters after the meeting. (Source: Bloomberg)

Japan: Posted a smaller-than-expected current-account surplus in April, highlighting weak global demand that is depressing exports. The excess in the widest measure of the nation's trade was JPY 333.8b (USD 4.2b), the Ministry of Finance said. (Source: Bloomberg)

Japan’s economy grew a revised 1.2% qoq in 1Q12, more than the preliminary reading of 1.0% and economists’ median forecast for a 1.1% expansion. (Reuters)

EU: Spain asks for EUR100bn bank bailout
Spain asked euro-region governments for as much as EUR100bn to rescue its banking system. The loan will be channeled through the state’s bank-rescue fund, known as FROB, and extended to banks that need it. FROB will act as the “agent of Spanish government,” which “will retain the full responsibility of the financial assistance and will sign the MoU.” Conditions will be “focused on specific reforms targeting the financial sector,” and only lenders that need capital will get the loans. EUR100bn is equivalent of about 10% of Spain’s GDP. FROB debt counts as public debt, which amounted to 69% of GDP last year. Interest on the loan will affect Spain’s deficit. (Bloomberg)

UK: Business confidence declines as economy weakens
UK indexes of business confidence and job prospects dropped in May, indicating the economy will weaken and employment may fall later this year. A gauge of company sentiment fell to 95.5 from 96.2 in April. An employment measure declined to 94.9 from 95.5. A reading below 95 indicates contraction. An output index, which measures production expectations for the next three months, rose to 96.7 in May, a one-year high, from 95.8. Still, the decline in sentiment gauge, which predicts business performance six months ahead, indicates growth will “tail off later in 2012.” (Bloomberg)

U.K: Producer prices unexpectedly fell in May as the cost of petroleum products dropped the most in more than three years. The price of goods at factory gates fell 0.2% MoM from April, the first decline since December, the Office for National Statistics said. Raw material costs fell 2.5% MoM, the most since December 2008. (Source: Bloomberg)

Germany: Exports declined in April for the first time this year as Europe's worsening debt crisis and weaker global growth curbed demand. Exports, adjusted for work days and seasonal changes, fell 1.7% MoM from March, when they gained 0.8% MoM, the Federal Statistics Office in Wiesbaden said. Imports plunged 4.8% MoM. (Source: Bloomberg)

Italy: Industrial production declined in April as demand for the nation's manufactured goods slumped at home and abroad amid Europe's sovereign-debt crisis. Output dropped 1.9% MoM from March, when it rose a revised 0.6% MoM, national statistics office Istat said. Production fell 9.2% YoY on a workday-adjusted basis. (Source: Bloomberg)

U.S: Political risk may spur downgrade by 2014, S&P says. "The credit strengths of the U.S. include its resilient economy, its monetary credibility and the U.S. dollar's status as the world's key reserve currency," S&P said in a report. Weaknesses "include its fiscal performance, its debt burden, and what we perceive as a recent decline in the effectiveness, stability, and predictability of its policymaking and political institutions, particularly regarding the direction of fiscal policy." S&P stripped the U.S. of its top AAA ranking on Aug. 5, cutting it to AA+ while criticizing the nation's political process and saying that spending cuts agreed on by lawmakers wouldn't be enough to reduce record deficits. Moody's Investors Service and Fitch Ratings have kept their top grades on the U.S., both have a negative outlook. (Source: Bloomberg)

US: Obama says it's clear economy not doing fine
President Barack Obama stressed on Friday the US economy was not doing fine, seeking to clarify his earlier comments about the health of the private sector that Republicans pounced on to try to paint him as out of touch. Speaking to reporters in the Oval Office, Obama said that while corporate profits were strong and companies had been adding jobs, small businesses were having a tough time getting financing and other pockets of the economy needed more attention. (Reuters)

US: Fed proposal closely follows Basel capital pact
The Federal Reserve rejected pleas by the US banking industry in releasing a rigorous interpretation of an international agreement on higher capital standards for banks, known as Basel III. US banks have pushed the Fed, for instance, to allow them to more heavily count mortgage servicing rights and the unrealised gains and losses of certain securities toward their capital requirements than allowed by Basel III, but the US central bank's draft rule closely follows the international agreement. The basics of the Fed's proposals would capture even the smallest banks, a move likely to irritate community bankers who had been hoping to escape the brunt of the new standards. The Fed board voted 70 on Thursday to put the proposal out for public comment for 90 days. The Federal Deposit Insurance Corp and the Comptroller of the Currency are expected to approve the proposal soon as well. (Reuters)

US political and fiscal risks may lead to another downgrade of the its credit rating by 2014 by Standard & Poor’s, which affirmed its negative outlook on the nation’s debt. (Bloomberg)

US wholesale inventories rose 0.6% mom in Apr (0.3% in Mar), exceeding consensus of 0.5%. (Bloomberg)

The US trade deficit improved to US$50.1bn in Apr due to a drop in imports (a revised -US$52.6bn in Mar), but remains higher than the consensus of –US$49.3bn. (Bloomberg)

20120611 1053 Malaysia Corporate Related News.

Takaful Malaysia to open four more myCare Centres
Syarikat Takaful Malaysia Bhd will open four more Takaful myCare Centres in Putrajaya, Malacca, Sungai Petani and Temerloh this year. General Manager (retail agency) Mohd Suhaimi Ahmad said each centre would cost an average RM500,000. The centres in Putrajaya and Malacca would be opened in July while the other two by year-end, he told Bernama. (StarBiz)

Bangkok’s Suvarnabhumi airport closes one of its runways for 2 months
AirAsia Bhd and its associate Thai AirAsia are expected to be among the hardest hit carriers when Bangkok’s Suvarnabhumi airport closes one of its runways for two months beginning today. AirAsia executives said the airline expects longer turnaround time for its Bangkok operations as a result of the temporary closure of the East runway, but stressed that it doesn’t plan to reduce the frequency of flights to Bangkok. (Financial Daily)

Bumper dividend for ECM Libra shareholders
Shareholders of ECM Libra Financial Group Bhd could be in for a bumper dividend after the group’s RM890m disposal of its investment banking and securities business to K&N Kenanga Holdings Bhd. According to financial executives close to the situation, ECM Libra is expected to distribute the cash proceeds from the divestment to existing shareholders in the form of a special dividend of at least 60 sen per share. (Financial Daily)

Sime woos back investors
Sime Darby Bhd’s uptrending share price proves that investors’ confidence has returned to the once scandalized conglomerate, chairman Tun Musa Hitam said. In 2010, Sime Darby announced it had to make provisions for about RM1bn due to cost overruns for certain projects in its energy and utilities division. Nonetheless, Musa said the conglomerate is now thriving, mainly because of palm oil and also its industrial and motor divisions. (BT)

Kelington major owners to hold on to stakes
Major shareholders of Kelington Group Bhd have no immediate plans to sell their stake in the company despite investors approaching them, said its chief operating officer Ong Weng Leong. Kelington, which offers ultra high purity gas (UHP) and chemical delivery systems, is founded by the company’s chief executive officer Raymond Gan and Gan and Ong have a combined 47.2% stake in the company. (BT)

Dijaya to acquire a land in Jalan Pudu for RM54m
Dijaya Corp Bhd’s wholly-owned subsidiary Advent Nexus SB has entered into a sale and purchase agreement with Multi-Purpose Holdings Bhd to purchase freehold land for a building in Jalan Pudu, Kuala Lumpur for RM54m. In an exchange filing last Friday, the property developer said that the proposed acquisition is in line with the group’s direction of increasing its investment property portfolio. (Malaysian Reserve)

Johor’s Nusajaya projects main attraction for Singapore buyers
Strong demand from Singaporeans for property projects, especially in Nusajaya, Johor, is a comforting note for UEM Land Holdings Bhd. Its managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said the republic’s move to tighten housing regulation has affected the purchasing power within Singapore. He added that most of the foreign buyers were Singaporeans but they also have buyers from Japan, China, UK, Australia, Vietnam, Indonesia, South Korea and the Middle East. (Malaysian Reserve)

Glenealy Plantations acquires 51% stake in Willsmart for total 100%
Glenealy Plantations (Malaya) Bhd through its subsidiary Bright Palm Pte Ltd has acquired 102 shares, representing a 51% stake, in Willsmart International Ltd from Camelodge Ltd for RM28.8m. In an exchange filing last Friday, the company said upon acquisition, its shareholding in Willsmart has increased to 100%. (Malaysian Reserve)

Healthcare: June 14 decision on IHH cornerstone investors. The IHH Healthcare Bhd (IHH) board will have to decide by Thursday whether to increase the size and allocation of shares to cornerstone investors given the preliminary demand from these investors for the company's initial public offering (IPO) is now in excess of 2b shares. (Source: The Star)

Plantation: FGV set to expand Canada ops. FELDA Global Ventures Holdings Bhd (FGV), en route to a listing on Bursa Malaysia this month, is set to expand Malaysia's investment footprint in Canada this year via increased investments of another CAD30m-40m in the canola business. The expansion of the company's operations is meant to upgrade the port facilities so they can get products out of the port faster to its export markets. (Source: Business Times)

MYBiomass Sdn Bhd, a joint venture between the Malaysian Industry-Government Group for High Technology (MIGHT), Felda Global Ventures Holdings (FGVH) and Sime Darby, has dispatched its first oil palm biomass shipment for testing. Twelve tonnes of oil palm biomass would be shipped to a pilot plant in Italy which converts biomass into industrial sugar, said MIGHT, an agency in the Prime Minister's Department, in a statement. FGVH and Sime Darby each own a 40% stake in MYBiomass and MIGHT the remaining 20% in the special-purpose vehicle. It is currently studying the feasibility for a project to convert oil palm biomass into high-value green chemicals. (Starbiz)

Property: Prices increase at slower pace. Property prices in Malaysia increased, albeit at a slower pace in 4Q11 from previous quarters, according to Bank Negara Malaysia's (BNM) website. In 4Q11, the Malaysian House Price Index grew 6.6% compared to 9.9% increase in 3Q11, and in contrast to gains of 10.6% in 2Q and 9% in 1Q. (Source: The Edge Financial Daily)

Axiata: Approaches Idea to form tower company
Axiata Group has approached Aditya Birla group-owned Idea Cellular to form a transnational tower company with operations across South-East Asia. Axiata wanted to acquire or merge more than 8,000 towers of the Indian mobile operator as it looked to create a unified tower entity with a presence in seven nations, Times of India reported, quoting banking sources directly familiar with the matter. Axiata holds a stake of just under 20% in Idea Cellular. Diversified Indian conglomerate Aditya Birla, which controls majority interest in the thirdlargest domestic mobile phone firm, has studied the Axiata plan although no decision has been taken yet.  Birla’s response will be critical to Axiata’s attempts to carve out a tower company in countries where it owns or has JV in the telecom business. (StarBiz)

Genting Bhd: Singapore unit buys stake in Australia's Echo
Genting  Singapore  said Friday it had taken a US$234m (RM737.1m) stake in Echo Entertainment, raising the prospect of a battle for  control over the Australian casino company with billionaire rival James Packer. Packer, who wants to use Echo's licence to build a new casino complex in Sydney to attract more Asian high-rollers, has been agitating for change at Echo after building a 10% stake in the company, and succeeded in ousting the company's chairman on Friday. A Genting spokeswoman declined to give the size of the stake but said the value of its investment was S$298m (RM721.1m). The Australian newspaper said earlier that Genting had built up a 4.9% stake in Echo, which runs Sydney's Star casino and Jupiter's on the Gold Coast of Australia. A full takeover would cost more than A$3bn(RM9.45bn) and both Packer and Genting will face tough regulatory scrutiny. Echo said that its chairman, John Story, has resigned, bowing to a destabilising campaign run by Packer who owns a rival casino operator and wanted to sack the chairman. (Business Times)

MMC Corp: Unit to withdraw RM83.61m claim against Sumitomo
MMC Corp's unit, Prai Power Sdn Bhd, has agreed to withdraw its claim in the arbitration proceedings against Sumitomo Corp of Japan where it had earlier sought RM83.61m. MMC Corp said Prai Power had on Thursday signed a settlement agreement with its insurers Allianz General Insurance Co (Malaysia) Bhd and Sumitomo. The settlement agreement substantially sets out the parties' agreement to resolve and settle in full the dispute between the parties in the arbitration proceedings on the terms and conditions of the settlement agreement. In August 2011, Prai Power had filed a statement of claim against Sumitomo  - referring to a contract signed in October 2000 - where Sumitomo would design, engineer, manufacture, erect, install and commission the Prai power plant. Prai Power alleged that Sumitomo had breached the obligations under the contract by supplying a defective rotor, after the rotor was found damaged on September 11 2006. (Business Times)

DRB-Hicom: Preve sales fall short of target
Sales figure for Proton Holdings’ Preve have fallen short of the initial target of 4,000 units per month which was made at the launch of the new model’s launch on April 16. Only 494 units of Preve were sold in April, while in May, 2,699 units were sold. This works out to a total of 3,193 units in 1.5 months.  However, a Proton spokesman pains a more rosier picture, saying that sales numbers have climber strongly since May. He said as of June 6, orders for the Preve have exceeded 10,000 units. (Financial Daily)

Group Lotus confirmed that Dany Bahar has been terminated as Lotus Chief Executive Officer with immediate effect. The decision was made by Group Lotus plc's board following the results of an investigation into a complaint made against him by DRB-Hicom. The company also announced the appointment of 51-year old British permanent resident, Aslam Farikullah, as the Chief Operating Officer with immediate effect. (Bernama, BT)

Dijaya Corp: Buys land, building from MPHB for RM54m
Dijaya Corporation’s unit Advent Nexus Sdn Bhd is acquiring freehold land with a building in Kuala Lumpur for RM54m cash from Multi-Purpose Holdings. The company said its unit had entered into a sale with MPHB  to acquire the land and building in Section 19 in Kuala Lumpur. On the rationale for the acquisition, Dijaya said it was in line with its direction of increasing its investment property portfolio that would provide it with long term stable and sustainable income stream. (Financial Daily)

Yinson Holdings: Yinson-PTSC to get US$700m FPSO job
Yinson Holdings and its partner PetroVietnam Technical Services Corp (PTSC) have managed to negotiate with Lam Son, a JV between Vietnam’s oil major PetroVietnam and Petronas, for a substantially higher contract value for a floating production, storage and offloading (FPSO) job that was previously awarded to Norway-based Fred Olsen Production. The job to supply Lam Son a FPSO vessel on a 10-year bare-boat charter was awarded to Fred Olsen 4 months ago, and the contract was valued at US$500m (RM1.6bn). The Norwegian outfit is said to be facing financing issues for the project, and as the letter of intent from Lam Son expired recently, the Yinson-PTSC JV has stepped in. A person familiar with the matter said that, Yinson-PTSC managed to negotiate for a higher contract value of US$700m – US$500m for a 7-year bare-boat charter and a US$200m extension for another 3 years. The group will soon announce that it has won the job from Lam Son. A bare-boat charter means the JV will only deliver the FPSO to Lam Son, without having to operate the vessel on the client’s behalf. Yinson hold a 49% stake in the JV while PTSC, a unit of PetroVietnam, has the remaining 51%. (The Edge Weekly)

Petra Energy: In talks with Bourbon
According to industry sources, Petra Energy is in collaborative talks with French oil and gas outfit Bourbon SA, which could result in the two companies forming a consortium to bid for risk-service contracts (RSC) for marginal oilfields. It is understood that the talks could also involve Petra Energy acquiring stakes in some of Bourbon’s subsidiaries. When contacted, Petra Energy officials declined to comment on the matter. The source adds that Bourbon and Petra Energy have done work together for Petronas Carigali Sdn Bhd in the installation of subsea platform equipment in Kanowit, Sarawak. (The Edge Weekly)

Naim Holdings: Turning old Bintulu airport site into integrated upmarket project
Naim Holdings will develop the site of the old Bintulu airport into an integrated upmarket commercial and residential project. The new city centre for the booming industrial town will comprise condominiums, street mall, international-class hotel, shopping complex and other related facilities. Corporate services senior director Ricky Kho said the project on about 12ha would have a GDV of RM2bn. Kho said the proposed street mall would feature commercial shophouses and small home offices while the three-star hotel would have about 200 rooms. The condominium blocks would house some 600 units for sale to both local and foreign buyers. (StarBiz)

Yung Kong Galvanising Industries: Inks MoU with Becker Industrial Coatings
Yung Kong Galvanising Industries (YKGI) has entered into a memorandum of understanding (MoU) with Becker Industrial Coatings (M) Sdn Bhd (Beckers) with the aim of establishing a long-term strategic business partnership. YKGI said the MoU between both the parties was towards implementation of sustainable solutions for the new colour coating line of YKGI. This MOU is an understanding for cooperation, and the detailed matters of the cooperation will be further specified in a formal contract. The company said an announcement will be released upon the signing of the formal contract. (Financial Daily)

OM Materials (Sarawak) has obtained detailed environmental impact assessment (DEIA) approval for its US$500m JV manganese and ferro alloy smelting plant project in Samalaju Industrial Park, Bintulu. OM Sarawak is a 80:20 JV between OM Holdings and Cahya Mata Sarawak. Partial commissioning of the plant is targeted in the first quarter of 2014 and full commercial operation in the second quarter of 2015. (Star Biz)

Dialog Group believes that there is no concern over overcapacity in Pengerang, which oil majors are likely to consider given the political situation in the Middle East. Also, demand for petroleum products is expected to be strong given the momentum of Asia’s economic growth. Seperately, for Petronas's refinery and petrochemical integrated development (Rapid), some RM120bn worth of investments have been earmarked by Petronas including RM60bn by the national oil company and up to RM38bn by Taiwan’s Kuokuang Petrochemical Technology Co. (Star)

Statoil ASA, Norway’s largest oil and gas producer signed its first long-term deal for deliveries of liquefied natural gas (LNG) to Asia. The agreement was signed with Petronas Gas Berhad on 5 June, and will see Statoil delivering about 1bn cubic meters of gas to Malaysia’s first import LNG terminal at Melaka over three and a half years starting in Aug 2012, the Norwegian company said in a statement today. (Bloomberg)

Mass Rapid Transit Corp Sdn Bhd has no plans to buy the Bukit Bintang Plaza (BB Plaza) to help build an MRT station. Instead, MRT Corp said, it will work with the government to build an underground station integrated with BB Plaza. MRT Corp CEO Datuk Azhar Abdul Hamid said it is in talks with the government on this, adding that the plan will do away with the need to involve private properties in completing the project and at the same time provides a golden opportunity to re-position the almost 40-year-old BB Plaza, Azhar said. "It must be clarified that there has never been any plan to acquire BB Plaza. Our principal focus is to build the Sungai Buloh-Kajang MRT Line. We do not want to be distracted by property development at this stage," he said. (BT)

Headwinds are turning into tailwinds for rubber glove manufacturers, prompting market anticipation of better financials and a sector re-rating in the coming quarters. A weaker ringgit against the US dollar and cheaper natural and synthetic rubber (nitrile), bode well for glovemakers’ revenue and profit as they add production capacity to meet global demand. But the degree to which players will benefit depends on their niche, and whether the macro-dynamics will be sustained in the near term. Supermax Corp group MD Datuk Seri Stanley Thai said glove manufacturers’ net profit margins are expected to improve in the coming quarters, thanks to the strengthening greenback. Bottom line is expected to improve also due to lower raw material prices. Natural rubber constitutes about half of glove producers’ cost structure. (Financial Daily)

CapitaMalls Malaysia Trust (CMMT) has received approval from the Securities Commission (SC) to establish a 20-year MTN Programme of up to RM3.0bn in nominal value, pursuant to which rated/unrated Medium Term Notes (MTNs) may be issued from time to time. The net proceeds from the issue of the MTNs (after deducting issue expenses) will be utilized to refinance existing borrowings and to finance investments, capital expenditure, asset enhancement initiatives and working capital of CMMT. CMMT will also be allowed to use the proceeds to refinance maturing MTNs on their respective maturity dates subsequent to the first issuance. (BMSB)

Oil & Gas: Petronas expects minimal impact from sanctions on Iran
Petronas expects a minimal impact from the proposed sanctions on import of oil from Iran, mooted by the EU. Its COO Datuk Wan Zulkiflee Wan Ariffin said he believed that the national oil corporation would be able to cope with the oil supply for its refineries following the sanctions. Petronas had stopped importing crude oil from Iran effective April 1 this year. It used to import between 50,000 and 60,000 barrels of Iranian crude per day for its refinery in Malacca and its majority-owned Engen refinery in Durban, South Africa. (Business Times)

Power: Lower rates for first-generation IPPs
According to industry sources, for the upcoming round of first-generation power purchase agreement (PPA) negotiations, the independent power producers (IPPs) could see their rate lowered by some 80%. It is learnt that if the 6 bidders in the running to extend their firstgeneration PPAs are successful, the new rate, currently under discussion, would be RM6 per kWh per month. In the previous contracts, the rate for the IPPs ranged from RM35 to RM50 per kWh per month. Most industry players are already expecting the first-generation IPPs to take a haircut if their PPAs are extended. (The Edge Weekly)

20120611 1033 Global Market Related News.

Asian Stocks Rise as Spain Seeks Bailout, China Inflation Slows (Source: Bloomberg)
Asian stocks rose, extending the first week of gains in six weeks by the regional benchmark index, as investors speculated a bailout for Spain’s banks will help ease Europe’s debt crisis and China’s inflation slowed. Canon Inc. (7751), a camera maker that gets about 31 percent of sales from Europe, rose 2.6 percent in Tokyo. Sharp Corp., jumped 6.6 percent as Japan’s biggest maker of liquid-crystal displays said it will separate its TV-panel unit next month and start selling screens to Foxconn Technology Group by September under a revival plan. Samsung Electronics Co., which counts China as its biggest market, gained 2.1 percent in Seoul. “Without a bailout, Spain would have had a serious liquidity issue,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Asia Ltd., which oversees about $10 billion. “In the short term, it’s a relief for Spain and for Europe but it’s not the end solution.
Growth in China has slowed from last quarter but I think policy makers will ensure that more fiscal and monetary measures will be available in order to lift the economy back up again.” The MSCI Asia Pacific Index (MXAP) advanced 1.2 percent to 112.85 at 9:45 a.m. in Tokyo, with about 17 stocks rising for each that fell before markets in Hong Kong and China open. The gauge rose for the first time in six weeks last week as global policy makers in the U.S., Europe and China signaled they would take steps to stimulate growth.

Japanese Stocks Rise on Spain Bank Bailout, China Imports (Source: Bloomberg)
June 11 (Bloomberg) -- Japanese stocks rose, with the benchmark Nikkei 225 Stock Average (NKY) headed for the biggest gain since March, on speculation a bailout for Spanish banks will help stabilize the European debt crisis and after China’s imports grew faster than expected. Canon Inc. (7751), a camera maker that gets 31 percent of its revenue in Europe, advanced 2.9 percent. Fanuc Corp. (6954), a manufacturer of robotics controls for Chinese factories, rose 2.1 percent. Sharp Corp. (6753), Japan’s largest maker of liquid- crystal displays, gained 6.6 percent after saying it will separate its TV panel unit. The Nikkei 225 Stock Average added 2.3 percent to 8,650.51 as of 10:08 a.m. in Tokyo, poised for the biggest increase since March 27. The gauge rose 0.2 percent last week, snapping a nine- week loss. The broader Topix (TPX) Index gained 2 percent to 732.40, with all 33 of its industry groups climbing.
“The bailout will keep companies that borrow from Spanish banks from going down all together,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. “In China, overseas demand is stronger than expected, while domestic demand continues to slow. That makes it easy to do more monetary easing because it has a direct impact on domestic demand.” The Topix fell 16 percent from this year’s high on March 27 amid concern the European crisis is deepening and as growth in China slows. Shares on the measure are valued at 0.87 times book value. A number below one means a company can be bought for less than the value of its assets.

China’s Stock-Index Futures Rise on Trade Data, Easing Inflation (Source: Bloomberg)
China’s stock-index futures rose, signaling gains for the benchmark index, as the nation’s trade expanded more than economists estimated and easing inflation provided leeway to policymakers to ease monetary policy. Futures on the CSI 300 Index (SHSZ300) expiring in June, the most active contract, added 0.8 percent to 2,536.60 as of 9:17 a.m. local time. SAIC Motor Corp. (600104) may lead an advance for automakers after passenger-car sales beat analysts’ expectations. China Petroleum & Chemical Corp. and PetroChina Co. may drop after the government cut fuel prices by the most since 2008. “The May economic data are a little better than expected an the government will continue to loosen policies given these figures are still at relatively weak levels,” Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co., said by phone today.
The Shanghai Composite Index (SHCOMP) dropped 11.68 points, or 0.5 percent, to 2,281.45 on June 8. The CSI 300 Index declined 0.7 percent to 2,542.33. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, retreated 0.4 percent in New York.  The Shanghai measure slid 3.9 percent last week, the most since the five days ended Dec. 16, as concerns about a deeppening slowdown overshadowed the first cut in lending and deposit rates since 2008. About 6.8 billion shares changed hands on the gauge on June 8, 24 percent lower than the daily average this year. Thirty-day volatility was at 15.34, compared with this year’s average of 18.69.

Abu Dhabi Shares Rise Most in 2 Months on Etisalat (Source: Bloomberg)
Abu Dhabi stocks rose the most since March on bets the government may permit foreigners to buy shares of Emirates Telecommunications Corp. (ETISALAT), the largest publicly- traded company in the United Arab Emirates. Saudi shares gained. Etisalat, as the phone company is known, advanced the most since January even after saying it’s not aware of a decision to change the law that governs foreign ownership. The ADX General Index (ADSMI) rose 0.6 percent, the most since March 25, to 2,454.47 at the close in Abu Dhabi. The Bloomberg GCC 200 Index (BGCC200) climbed 0.7 percent after Saudi Arabia (SABIC)’s Tadawul (SASEIDX) rallied 1.3 percent, the most since April 21. Bank Nizwa (BKNZ) jumped 13 percent in the trading debut of the first Omani Shariah-compliant lender.
A law that governs Etisalat may be amended to allow foreign and institutional investors to own the shares, Emarat Alyoum reported last week, citing people it didn’t identify. A change will help widen ownership of shares beyond U.A.E. citizens and give overseas investors’ access to Etisalat, which may post a 26 percent increase in profit this year, according to the mean estimate of eight analysts on Bloomberg. “If the speculation is true, this would be good for the market as it could attract liquidity to the heavy-weighted stock, especially from foreign investors,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities, the 21st most active brokerage of 53 by value traded in May, according to the Dubai Financial Market. A change in the foreign ownership structure of the stock may help boost the U.A.E.’s chance of being promoted to emerging market status at MSCI Inc. (MSCI), he said.

European Stocks Post Biggest Weekly Gain in Four Months (Source: Bloomberg)
European stocks posted their biggest weekly advance in four months as China cut interest rates and the European Central Bank said it’s ready to add more stimulus if the economy worsens. Banco Espirito Santo (BES) SA and CaixaBank (CABK) led gains on a gauge of lenders as Spain moved closer toward seeking emergency aid to rescue its banking system. Assicurazioni Generali SpA (G), Italy’s largest insurer, jumped 8.4 percent as it named a new chief executive officer. MAN SE, climbed 5.6 percent after Volkswagen AG increased its stake in the truckmaker. The Stoxx Europe 600 Index (SXXP) advanced 2.9 percent to 241.93 this past week, the biggest jump since Feb. 3. The benchmark measure has still tumbled 11 percent from this year’s high on March 16 on concern Greece may be forced to leave the euro currency union. The selloff has left the gauge’s valuation at 10.1 times estimated earnings of its companies, according to data compiled by Bloomberg.
“The bottom line for this week’s rebound was a technical recovery, backed by high hopes of stimulus in the U.S. and in Europe,” said Trung-Tin Nguyen, a Zurich-based hedge-fund manager at TTN AG. “The recovery could still continue for a little while, but there’s still a lot of noise disturbing the markets, with the Greek elections coming up and Spain’s problems still looming.”

Russia Stocks Have Biggest Weekly Jump in Four Months on Crude (Source: Bloomberg)
Russian stocks had their biggest weekly increase since February as oil climbed on bets Europe’s debt crisis will be contained. The Micex Index (INDEXCF) added 0.4 percent to 1,338.07 by the close in Moscow, bringing its weekly gain to 3.1 percent, the most since Feb. 5. OAO Rosneft, Russia’s biggest oil company, rose 0.7 percent, while OAO Sberbank, the country’s largest lender, added 0.3 percent. Urals crude, Russia’s main export blend, advanced 0.8 percent yesterday to $98.24 a barrel, while oil traded in New York had its first weekly gain in six. Crude rebounded by $1.21 in the last 20 minutes of floor trading as Spain prepared to become the fourth of the 17 euro-area countries to seek emergency assistance. Russia, the world’s biggest energy exporter, relies on oil and gas sales for about 50 percent of its budget revenue.
Rosneft advanced to 198.71 rubles, trimming its weekly drop to 3.5 percent. Sberbank, the biggest holder of Russian retail deposits, climbed to 81.58 rubles, a 3.1 percent weekly increase. Russian stocks trade at 4.9 times estimated earnings, having lost 4.6 percent this year. That compares with a 1.2 percent drop for the MSCI Emerging-Market Index (MXEF) which trades at 9.3 times projected earnings.

Treasuries Drop as Spanish Bailout Call Saps Safey Demand (Source: Bloomberg)
Treasuries fell after Spain became the fourth member of the euro bloc to seek a bailout since the start of the region’s debt crisis, damping refuge demand. Benchmark 10-year yields touched a more than one-week high as Asian stocks rallied after Spain asked euro-region governments for as much as 100 billion euros ($126 billion) to rescue its banking system. The U.S. is scheduled to auction tomorrow $32 billion of three-year notes, followed by $21 billion of 10-year securities and $13 billion of 30-year bonds later in the week. “The news on the Spanish bailout is triggering a relief rally in stocks,” said Hitoshi Asaoka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third- largest listed bank. “The bias is for Treasuries to be sold to some extent in the risk-on environment.”
The 10-year yield rose seven basis points, or 0.07 percentage point, to 1.71 percent as of 9:30 a.m. in Tokyo, the highest since May 30, Bloomberg Bond Trader data show. The 1.75 percent security maturing in May 2022 sank 5/8, or $6.25 per $1,000 face amount, to 100 13/32. The rate increased 18 basis points last week, the most since the period ended March 16.

Euro Rises to Two-Week High on Spain Bailout Request (Source: Bloomberg)
The euro rose against most of its major counterparts after the region’s governments agreed to provide Spain with a bailout loan, fanning expectations European leaders will step up effort to counter the debt crisis. The 17-nation currency climbed to a two-week high after Spain asked for as much as 100 billion euros ($126 billion) to rescue its banking system, making it the fourth member in the currency bloc to seek rescue. The dollar and yen fell on decreased demand for refuge assets. “Markets were wondering whether Spain was going to drag on for another month or two,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. The Spanish bailout is positive for the euro “because it is evidence that policy makers are willing to act.”
The euro reached $1.2671, the highest since May 23, before trading at $1.2637 as of 9:55 a.m. in Tokyo, 1 percent higher than the June 8 close in New York. It jumped 1.1 percent to 100.60 yen. The dollar added 0.1 percent to 79.60 yen. The MSCI Asia Pacific Index of shares advanced 1.3 percent.

FOREX-Euro falls vs dollar as Spain concerns mount
LONDON, June 8 (Reuters) - The euro fell against the dollar and yen  after a Spanish credit rating downgrade added to investor reluctance to take on risk and ratcheted up concern the European debt crisis was intensifying.
"With the negative news on Spain's rating cut it's back to reality for the market. The recovery we saw in the last few days was not a sustainable one," said Lutz Karpowitz, currency strategist at Commerzbank, who forecast the euro would be around $1.20 by the end of June.

Greece Threatens Wall Street Jobs in Third Trading Plunge (Source: Bloomberg)
Wall Street bankers and traders, given hope by a market rebound in the first quarter, are now seeing earnings and paychecks threatened by turmoil in Greece in what is becoming an annual cycle. For a third consecutive year, revenue from investment banking and trading at U.S. firms may fall at least 30 percent from the first quarter, Richard Ramsden, a Goldman Sachs Group Inc. (GS) analyst, said in a note last week. Greece, which gave English the word “cycle,” has been the main reason each year that the second quarter soured after a promising first three months. Deal volume has dropped and equity and credit markets have fallen on concern that Greece may abandon the euro and the European sovereign-debt crisis will spread to nations including Spain. Those economic issues cut profit, bonuses and jobs at Wall Street firms in last year’s second half and threaten to do the same in 2012.
“It’s going to be a tough summer at least, and it does feel like the last couple years all over again,” said David Konrad, an analyst at KBW Inc. in New York. “The bank valuations seem unfairly discounted, but investors are looking at this year and saying, ‘I’m not going to fall for this again.’”

U.S. Retail Sales Probably Fell on Drop in Auto Purchases (Source: Bloomberg)
Retail sales in the U.S. probably declined in May for the first time in a year as slower employment and subdued wage gains damped demand for automobiles, economists said before reports this week. The projected 0.2 percent decrease last month would follow a 0.1 percent gain in April that was the smallest this year, according to the median forecast of 62 economists surveyed by Bloomberg News ahead of Commerce Department figures due June 13. A measure of the cost of living fell last month for the first time in two years, reflecting cheaper gasoline prices, other data may show. Limited payroll growth and unemployment exceeding 8 percent may make it tough for consumer spending to improve after a first-quarter pace that was the fastest in a year. At the same time, lower prices at the gasoline pump are providing relief for Americans and also helping contain inflation, giving the Federal Reserve more room to stimulate the economy should Europe’s debt crisis worsen.
“Retail sales will be quite soft,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “It is quite evident that the job market is slowing. The Fed is much more worried about the high level of unemployment than about inflation, which is likely to remain moderate.”

China Trade Surprise Signals Domestic Stimulus Focus (Source: Bloomberg)
China’s exports rose in May at more than double the pace analysts estimated while industrial output and retail sales trailed forecasts, signaling that last week’s interest-rate cut was aimed at countering a domestic slowdown. Overseas shipments climbed 15.3 percent from a year earlier, the customs bureau said yesterday, exceeding all 29 estimates in a Bloomberg News survey. Industrial output gained by less than 10 percent for a second month and retail sales increased the least in almost six years excluding holiday-month distortions, statistics bureau reports showed June 9. China’s trade resilience signals Europe’s crisis has yet to spark a collapse in world commerce on the scale of 2008, even as Spain’s banking woes threaten to deepen the trauma. Stronger exports and imports also support the case for Premier Wen Jiabao to adopt a more restrained stimulus than the credit boom officials unleashed in 2008, which stoked a property bubble.
“The better-than-expected trade data should help alleviate ongoing concerns of a sharp growth deterioration in the near term,” said Sun Junwei, a Beijing-based economist with HSBC Holdings Plc. “The key to securing a soft landing pivots on reviving domestic demand and that will necessitate more stimulus but it will be more measured than in 2008 and monetary policy won’t be eased excessively.”

China Slowing Inflation, Output Growth Add Stimulus Pressure (Source: Bloomberg)
China’s consumer prices rose the least in two years in May and industrial output and retail sales trailed estimates, adding pressure for more stimulus after the first interest-rate cut in three years. Inflation slowed to 3 percent from a year earlier, the National Bureau of Statistics said yesterday, compared with the 3.2 percent median forecast in a Bloomberg News survey. Production increased 9.6 percent, lower than a projected 9.8 percent gain, and retail sales climbed 13.8 percent, the Beijing-based bureau said in separate statements. The data add to concern global growth is stalling as Greece teeters on the edge of exiting the euro, Spain seeks a bailout for its banks, and U.S. job growth weakens. Premier Wen Jiabao may introduce additional stimulus to protect a full-year growth target of 7.5 percent even as the nation wrestles with bad loan risks from local government debt.
“These data should defeat any remaining complacency that the policy response has been adequate to maintain steady growth,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. “More dramatic easing, especially in housing and local government financing vehicles is urgently needed and necessary to avoid a hard landing in the Chinese economy.”

Wen Stimulus Helps Mid-Size Stocks, Semple Says: China Overnight (Source: Bloomberg)
Chinese small and mid-size stocks are attractive as monetary authorities may cut interest rates once or twice more this year, said David Semple, who oversees $35 billion in assets at Van Eck Associates Corp. Semple, whose Van Eck Emerging Markets Fund has beaten 95 percent of its peers in 2012, said he likes China Minsheng Banking Corp. (1988), Greatview Aseptic Packaging Co., Stella International Holdings Ltd. (1836) and Sitoy Group Holdings Ltd. (1023) The fund has returned 7.6 percent this year, compared with a 1 percent loss for the MSCI Emerging Markets Index. (MXEF) “Larger Chinese companies are fully valued whereas small and mid-caps have outperformed this year, which is where we’ve found our sweet spot,” Semple, Van Eck’s director for international equity, said in an interview at Bloomberg’s office in New York on June 8. “If you want solid domestic demand with growth at a reasonable price, then you end up going down the cap curve.”
Chinese stocks traded in New York rose for the first time in six weeks after the People’s Bank of China on June 7 reduced benchmark interest rates for the first time since 2008 to bolster growth in the world’s second-largest economy. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. advanced 3.5 percent last week, snapping a five-week slump that sent the gauge to an eight-month low on June 4. The index dipped 0.4 percent to 90.27 on June 8.

Singapore’s Exports Rose in May on Sales of Electronics, Drugs (Source: Bloomberg)
Singapore’s export growth quickened in May as shipments of electronics and pharmaceuticals increased. Non-oil domestic exports climbed 3.2 percent from a year earlier, after a revised 1.7 percent gain in April, the trade promotion agency said in a statement today. The median of seven estimates in a Bloomberg News survey was for a 3 percent gain. Growth in overseas shipments may be tempered in coming months as purchasing managers’ indexes in export-dependent Asian economies including China and South Korea signal manufacturing is still slowing, forcing officials to evaluate whether to add stimulus to spur growth. Policy makers across the globe are girding for a deeper impact from Europe’s debt woes, with China and Australia lowering interest rates last week.
“We continue to expect a pickup in activity in the U.S. and China in the second half, which would bode well for Singapore’s exports and production,” Vincent Conti, a Singapore-based analyst at Australia & New Zealand Banking Group Ltd., said before the release. “The policy easing in China will help that process along.”

Australia’s Strong Economy Proving ‘Doomsayers’ Wrong, Swan Says (Source: Bloomberg)
Australia’s economic performance is proving the “doomsayers” wrong, Treasurer Wayne Swan said ahead of a government conference this week to address challenges including an elevated currency and uneven growth. A 4.3 percent expansion in the first quarter from a year earlier and the addition of 38,900 jobs in May were standout achievements, Swan said in his weekly economic note yesterday. Capitalizing on growth opportunities is a topic at Prime Minister Julia Gillard’s economic forum in Brisbane on June 12-13, he said. Public support for Gillard’s government isn’t getting a lift from one of the fastest-growing economies in the developed world, led by the resource-rich regions in the north and west. Consumer confidence is subdued and her governing Labor Party trails in opinion polls as tourism, manufacturing and retail industries across the south and east struggle with the sustained strength of the local currency.
“There are always those who are all too ready to talk down our nation’s prospects,” Swan said. “Over the past week, the doomsayers have been proved to be completely and absolutely wrong.”

Italy Moves Into Debt-Crisis Crosshairs After Spain (Source: Bloomberg)
The 100 billion-euro ($125 billion) rescue for Spain’s banks moves Italy to the frontline of Europe’s debt crisis, putting pressure on Mario Monti’s unelected government to avoid succumbing to a market rout. “The scrutiny of Italy is high and certainly will not dissipate after the deal with Spain,” Nicola Marinelli, who oversees $153 million at Glendevon King Asset Management in London, said in an interview. “This bailout does not mean that Italy will be under attack, but it means that investors will pay attention to every bit of information before deciding to buy or to sell Italian bonds.” Italy has more than 2 trillion euros of debt, more as a share of its economy than any advanced economy after Greece and Japan. The Treasury has to sell more than 35 billion of bonds and bills per month -- more than the annual GDP of each of the three smallest euro members, Cyprus, Estonia and Malta.
Spanish Economy Minister Luis de Guindos said on June 9 that he would request as much as 100 billion euros in emergency loans from the euro area to shore up a banking system hobbled by more than 180 billion euros of bad assets. Mounting concern about the state of Spain’s banks and public finances drove the country’s borrowing costs to near euro-era records last month, dragging up Italian rates in the process.

Spain’s Bailout Defeat Weakens Rajoy’s Deficit Goal (Source: Bloomberg)
Prime Minister Mariano Rajoy’s surrender to European officials on taking a bailout for Spain’s banks may weaken his political authority and his credibility in financial markets. Rajoy’s June 9 request for as much as 100 billion euros ($126 billion) after stating two weeks ago that Spain wouldn’t need a rescue marks a swift reversal for the premier who won the biggest majority in 30 years in November. It may fuel skepticism he can meet his deficit-cutting promises. “The emperor’s clothes are tattered,” Simon Maughan, financial strategist at Olivetree Securities Ltd., said in a telephone interview yesterday. “Unless he uses this money to attack the regions and control the failed cajas what threads he has left will be stripped off him.”
Rajoy is trying to persuade regional leaders and voters to accept austerity, and convince bond investors the cuts will deliver the deficit goals he has pledged. Should he fail, he may have to return for a larger rescue for the Spanish sovereign, potentially draining the euro area’s financial ammunition.

Osborne Says Euro-Zone Crisis Is Killing Off Britain’s Recovery (Source: Bloomberg)
Chancellor of the Exchequer George Osborne said the U.K.’s recovery is being “killed off” by the euro area’s deepening crisis and the economy faces “huge” risks from a disorderly breakup of the region. “Our recovery -- already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years -- is being killed off by the crisis on our doorstep,” Osborne wrote in an opinion article in the Sunday Telegraph, published yesterday. “The risks for us of a disorderly outcome are huge.” The euro-region’s turmoil deepened as Spain on June 9 became the fourth member to seek a bailout since the start of the debt crisis more than two years ago with a request for as much as 100 billion euros ($125 billion) in loans to rescue its banking system. Osborne said that while there were signs a solution will be found for Spain’s banking crisis, “the lesson of the last two years is that treating the latest symptom does not cure the underlying condition.”
Any “further pooling of sovereignty” among European Union members over financial supervision or fiscal policy should be limited to the euro’s 17 member states, Osborne said. Political moves in the U.K. to transfer more power to Brussels would be subject to a referendum, he said.

Spanish Bondholders May Rank Behind Official Loans After Bailout (Source: Bloomberg)
Investors holding bonds issued by Spain and its banks will probably rank behind official creditors in the queue for payment after the nation asked for a bailout of as much as 100 billion euros ($125 billion). The funds will be channeled through the state-run FROB bank-rescue fund and Spain will “retain the full responsibility of the financial assistance and will sign” the agreement with the other partners, according to the statement issued June 9. The document did not make clear whether the European Stability Mechanism, the region’s permanent support fund, which is likely to start operating in July, or the temporary European Financial Stability Facility, will make the loan.
“This is state financing, and the risks of an equity injection into the banks will stay with Spain,” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland Group Plc in London. “Spain needs a systematic restructuring of its banking system, which could entail haircuts to subordinated bank debt. Official lenders on the other hand are likely to demand seniority.” Spanish Prime Minister Mariano Rajoy has been forced to abandon his attempt to recapitalize the nation’s banks without outside help as the country’s descent into recession obliged lenders to own up to spiraling losses. While Rajoy said yesterday the agreement was “the opening of a credit line,” rather than a bailout such as those received by Greece, Ireland and Portugal, and the conditions of the loan affected the financial industry, the sovereign is ultimately responsible.

Spain’s Bailout Gives Rajoy Best Chance to Fix Banks (Source: Bloomberg)
Spain’s request for as much as 100 billion euros ($125 billion) of European bailout funds should provide the country with enough money to shore up its banking system after three failed attempts in as many years. “Now that they have this money, it will hopefully finally be possible to recognize all the hidden losses and clean up the system,” Luis Garicano, a professor at the London School of Economics, said in a phone interview. The amount sought is about 2.7 times the funds deemed necessary for Spanish banks by the International Monetary Fund in a report released June 8. Spain sought aid for its banks the following day, becoming the fourth euro member to seek a bailout since the debt crisis began almost three years ago.
The rescue request followed weeks of escalating concern that bad loans at Spain’s banks might overwhelm public finances. The Spanish crisis, coinciding with the prospect of Greece exiting the euro after elections on June 17, roiled financial markets around the world, sending the euro to an almost two-year low on June 1 and raising Spanish borrowing costs to near euro- era records.

Spain Seeks EU’s Fourth Bailout With $125 Billion Request (Source: Bloomberg)
Spain became the fourth euro member to seek a bailout since the start of the region’s debt crisis more than two years ago with a request for as much as 100 billion euros ($125 billion) to rescue its banks. Prime Minister Mariano Rajoy, who as recently as May 28 said he wouldn’t seek a bailout, characterized the deal as a credit line for banks and an endorsement of his policies. He spoke to reporters today in Madrid before flying to Gdansk, Poland, for a soccer match between the national team and Italy. “The 100 billion euros is the number that we were looking for so I’m cautiously optimistic,” Olly Burrows, credit analyst at Rabobank International, said in a telephone interview from London. “We still have to find a solution to the sovereign debt crisis: it’s not done yet and we still have to press on with the task of uniting Europe.”
Just seven months after winning a landslide victory,Rajoy was forced to abandon his bid to recapitalize Spanish banks without external help as the Treasury’s access to capital markets narrowed. Foreign investors slashed their holdings of Spanish debt amid concern banks’ bad loans may overwhelm public finances, driving borrowing costs to near euro-era records.

20120611 1032 Global Commodities Related News.

Speculators Fail to Reap Rally in Crops After Wager Cut (Source: Bloomberg)
Speculators reduced wagers on a rally in agricultural prices to a five-month low just as returns from crops and livestock beat most other commodities on concern that parched fields from Iowa to Russia will curb supply. Hedge funds and other money managers cut net-long positions across 11 U.S. farm goods by 20 percent to 312,099 futures and options in the week ended June 5, the lowest since Dec. 27, Commodity Futures Trading Commission data show. Corn holdings tumbled to the lowest since June 2010 and traders switched to betting on a decline in wheat prices. Agricultural commodities accounted for nine of the 10 best performers in the Standard & Poor’s GSCI Spot Index of 24 raw materials last week.
Speculators cut combined bullish bets across the S&P GSCI by 13 percent to the lowest this year on mounting concern that Europe’s widening debt crisis will derail global growth and curb demand for commodities. Agricultural prices rallied as dry weather harmed the corn crop in Iowa and Illinois, the biggest U.S. growers, and Russia’s government declared a state of emergency in some areas because of drought. “People don’t look at fundamentals when the crisis overshadows everything,” said Stanley Crouch, who helps oversee $2 billion of assets as chief investment officer at New York- based Aegis Capital Corp. “The tug of war gets tough when the correlation between the economy and agricultural commodities is very high.”

DTN Closing Grain Comments 06/08 14:23 DTN Closing Grain Comments 06/08 14:23 (Source: CME)
Corn Closes Week Strong on Weather Concerns
The corn market, led higher by new-crop issues on dry weather concerns finished with solid gains. Old-crop beans tried to follow but to no avail, joining the rest of the bean and wheat contracts lower, unable to overcome pressure from the stronger U.S. Dollar Index.

Wheat Market Recap Report (Source: CME)
July Wheat finished down 12 3/4 at 629, 9 3/4 off the high and 1 1/4 up from the low. December Wheat closed down 10 3/4 at 671 1/2. This was 2 1/4 up from the low and 9 off the high. The market saw an inside trading day with a fairly tight range and gave back part of yesterday's strong gains. There are some weather concerns for the Black Sea region and China but weakness in soybeans and a firm trade for the US dollar was enough to hold the market lower for the session. The market seemed to react to talk of the overbought condition after the surge higher yesterday and concerns that the surge in the US dollar is helping to discourage buyers of US wheat. Weekly export sales were slow this past week as the surge in wheat prices in May plus the dollar appreciation helped to limit export activity. Europe still has exportable wheat and the collapse in the euro may have attracted buyers. The market was down as much as 14 cents overnight but a recovery in the stock market and a jump in corn prices helped to support. The ongoing wheat harvest was seen as a limiting factor on the rally but talk that the production report and the supply/demand updates for next week could carry a positive tilt helped to support. July Oats closed up 4 at 304. This was 9 up from the low and 5 off the high.

Black Sea wheat - full of promise and pitfalls
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
CHICAGO, June 7 (Reuters) - The new Black Sea wheat futures contract launched this week on the CME certainly sounds like a good idea, given that the region accounts for roughly a quarter of world wheat trade and is located on the doorstep of Europe, the Middle East, and Africa -- all major importers of wheat and other grains.
But uptake and use of the contract may prove slow going since two of the region's top wheat exporters -- Russia and Ukraine -- have a track record of reneging on trade contracts whenever domestic supplies threaten to fall short, and risk-management practices featuring the use of futures and options contracts remain in their infancy among the area's producers and commercial users.

Corn Market Recap for 6/8/2012 (Source: CME)
July Corn finished up 3 3/4 at 597 3/4, 7 3/4 off the high and 12 1/2 up from the low. December Corn closed up 5 3/4 at 542 1/4. This was 15 3/4 up from the low and 2 1/4 off the high. The market worked through questionable outside market forces and the outlook for cooler and wetter weather across the Midwest for Monday through Wednesday and still pushed higher. Talk of a hot and dry extended forecast into the pollination period helped provide underlying support. In addition, reports that a major satellite forecasting firm sees corn production down about 1.2 billion bushels from the USDA forecast may have also sparked some buying support. December pushed to the highest level since May 22nd as the market followed the weather concerns and not the macro-economic concerns from Europe as a guide today. The short-term forecast is clashing with the longer-term forecast to keep the trade choppy. Bearish forces from outside markets (higher US dollar, weakness in energy, weakness in the stock market) had December corn down as much as 10 cents on the day overnight before the recovery rally into the mid-session. Concerns for areas which receive less rain coverage for the Monday to Wednesday rain event plus news that "much above" normal temperatures could return to the Midwest in the 11-15 day forecast models helped to support. Traders see 60-70% coverage of 3/4 of an inch or so for the Midwest in the mid-day models which helped to pressure the market off of the highs late. Traders see further deterioration in corn crop conditions for the Monday afternoon update with little rain this week. Old crop ending stocks are expected to decline by 25-30 million bushels for the supply/demand update next week as compared with 851 million bushels posted last month. New crop ending stocks are expected near 1.75 billion bushels from 1.881 billion last month. July Rice finished down 0.175 at 14.05, 0.06 off the high and equal to the low.

GRAINS-Wheat drops 1.2 pct, corn down on US stimulus uncertainty
SINGAPORE, June 8 (Reuters) - Chicago wheat slid 1.2 percent, while corn fell around 1 percent, weighed down by economic uncertainty as Federal Reserve Chairman Ben Bernanke gave no clues on whether a U.S. easing was in the offer.
"Fundamentals are quite supportive for oilseeds but I think the global economic situation is more important so it is more of repositioning by hedge funds," said Andrew Woodhouse, a Sydney-based analyst at Advance Trading Australasia.

Argentina wheat area seen shrinking further
BUENOS AIRES, June 7 (Reuters) - Argentina's new season wheat plantings are set to fall 17 percent from last year because of weather problems and farmers' pessimism over potential profits, Buenos Aires Grains Exchange said on Thursday.
Argentina is the world's sixth-biggest wheat exporter and the key supplier to neighboring Brazil, but growers have been planting less of the crop in recent years. They say a government system of export quotas depresses prices in the local market.
Russia's grain market debates impact of drought
GELENDZHIK, Russia, June 7 (Reuters) - Russia's Agriculture Ministry sought to assuage market concerns about potential drought damage to the grain harvest, putting it at odds with leading grain market players who see a smaller crop and reduced exports for the 2012/13 marketing campaign.
The Agriculture Ministry insists that concerns about damage from the drought have eased and is retaining its forecast for a grain harvest of 94 million tonnes in the new season, flat year-on-year, a deputy agriculture minister said on Thursday.
Rains restore yields in key Russian wheat regions
UST-LABINSK, Russia, June 7 (Reuters) - Farmers in Russia's southern breadbasket region of Krasnodar are facing a decline in wheat yields after nine months of inclement weather which will make it difficult for Russia to match last year's record exports.
Fyodor Druzhinin, chief executive of Kuban Agro, operator of an 84,000 hectare farm in one of Russia's key grain export regions, said he had feared his yields could be reduced by half before rains finally came to Russia's parched south.
Argentine grains sale freeze cuts Rosario traffic
BUENOS AIRES, June 7 (Reuters) - A sales freeze by farmers angry over government policies sharply cut the flow of corn and soy into Argentina's main export hub on Thursday, boosting global prices as traders factored in the risk of supply interruptions.
Growers in Argentina, the world's largest exporter of soymeal and soyoil, began a one-week strike on Wednesday after a recent land tax hike in the biggest farming province revived long-standing tensions with the government.
EU votes Jun 14 on extending zero grain import duties
PARIS, June 7 (Reuters) - The European Commission will ask member states to vote on June 14 on a proposal to extend the suspension of the bloc's import duties on feed wheat and barley until the end of the year, a source close to the matter said on Thursday.
"The proposal was discussed today. It will be put to vote on June 14 so that it can be published in the Official Journal by July 1," the source said.
China grain imports to rise, India eyes more exports
LONDON, June 7 (Reuters) - China will import more corn and soybeans next season to keep pace with growing domestic demand, while fellow emerging giant India is trying to export more of its record wheat and rice crops to reduce its surplus, officials said on Thursday.
China, already the world's largest soybean importer, is expected to increase its imports of the oilseed to 57.5 million tonnes in 2012/13 from 55 million in the current season, the state-owned China Grain Reserves Corporation (Sinograin) said.
Saudi Arabia considers adding soft wheat imports
LONDON, June 7 (Reuters) - Saudi Arabia may import soft wheat, in addition to the hard wheat it currently imports, to meet local food demand, opening it up to a wider range of wheat exporters, the kingdom's Grain Silos & Flour Mills Organization (GSFMO) said on Thursday.
The country has increased imports sharply since abandoning plans for self-sufficiency in wheat in 2008 and now aims to be completely reliant on imports by 2016 in order to save water.

India's grains stocks at record high, exposed to rot
NEW DELHI, June 7 (Reuters) - India's wheat inventory at government warehouses surged to a record 50.2 million tonnes on June 1, exposing more stocks to rot as unattractive global prices have hobbled government efforts to export from its overflowing grain bins.
India's entry into the global market could further dent benchmark U.S. wheat prices , which dropped 10 percent last week after much-needed rains hit drought-hit parts of Russia and on higher-than-expected yields from the U.S. winter harvest.
IKAR sees Russia 2012/13 grain crop, exports down
GELENDZHIK, Russia, June 7 (Reuters) - Russia's Institute for Agriculture Market Studies (IKAR) expects Russia's grain crop and exports to fall in the 2012/13 season, IKAR general director Dmitry Rylko said on Thursday.
IKAR sees the 2012/13 grain crop at 88.4 million tonnes, down from this season's 94.2 million tonnes, while exports could amount to 19.3 million tonnes, down from 27.4 million tonnes in the current season, Rylko said at the Russian Grain Union's XIII International Grain Round in a Black Sea resort town.

SOFTS-Sugar eases, arabicas near 23-month low
LONDON, June 8 (Reuters) - Raw sugar futures on ICE dipped, consolidating after a selloff in the prior session, and were underpinned by concerns over harvest delays in top producer Brazil due to rains.
“New York July sugar  will seek support at 19.46 cents per lb, and rise from this level towards 20.43 cents, according to Reuters market analyst Wang Tao.”

Fortuitous easing of Iran crude worries
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, June 8 (Reuters) - Through a combination of somewhat fortuitous factors, the imminent imposition of Western sanctions on Iran is shaping up as a bit of a non-event for Asian crude buyers.
The U.S. and European measures that start late this month and next aim to halt Iranian shipments of oil to Europe and impact those to the rest of the world by limiting the ability to pay or insure cargoes.
But far from being a major worry for Asia, replacing much of the about 1.5 million barrels day that the region used to buy from Tehran has been fairly easy.

OIL-Brent crude falls below $99 on US stimulus uncertainty
SINGAPORE, June 8 (Reuters) - Brent crude prices fell below $99 , pressured by uncertainty about the fragile economic recovery in top oil consumer the United States after its central bank chief offered few clues about more stimulus measures.
"Comments by Bernanke poured cold water on market expectations that central banks would offer more to revive their economies," said Victor Shum, senior partner at oil consultancy Purvin & Gertz. "The focus of the market has shifted since worries about Greece and Europe have returned."

China to cut fuel prices by 6 pct from Saturday
BEIJING, June 8 (Reuters) - China will cut fuel prices by nearly 6 percent from Saturday in the second reduction this year and the largest since late 2008, an official with a state-owned oil company said, as crude prices fell further since the last fuel cut in May.  
The government will lower the ceiling for gasoline retail prices by 530 yuan ($83.30) a tonne and diesel by 510 yuan, the official said, confirming an earlier industry report.

Top oil executives say market coping with Iran exit
KUALA LUMPUR, June 8 (Reuters) - The global oil market is well supplied and can cope with the loss of Iranian crude to Western sanctions, oil officials and executives, including the heads of Total  and Royal Dutch Shell , said this week.
An increase in global crude supplies and falling crude prices have helped cushion the impact of sanctions targeting Iran's controversial nuclear programme.

Petronas to decide on $20 bln refinery project mid-2013
KUALA LUMPUR, June 8 (Reuters) - Malaysia's state energy firm Petronas is expected to make a final investment decision on its $20 billion refinery project in Johor by the middle of next year, a senior executive told Reuters on Friday.
The refinery could start commissioning activities at the end of 2016, Wan Zulkiflee Wan Ariffin, Petronas's chief operating officer and executive vice president of downstream, said.

Oil Gains Most in Five Months on Spain Bailout, China (Source: Bloomberg)
Oil rose the most in more than five months in New York on speculation fuel demand will increase after Spain requested a European bailout to shore up its banks and China’s imports of crude climbed to a record. Futures increased as much as 3 percent, the biggest gain since Jan. 3. Spain will seek $125 billion from euro-area nations, Economy Minister Luis de Guindos told a press conference in Madrid yesterday after a conference call with the region’s finance ministers. China, the world’s second-biggest oil consumer, increased crude imports in May as prices declined, according to data from the Beijing-based General Administration of Customs. “European Union stabilization is always a positive factor,” Giyas Gokkent, group chief economist at National Bank of Abu Dhabi PJSC (NBAD), said by e-mail yesterday. “A significant chunk of extra annual demand for oil has been coming from China. Record oil imports will definitely have a positive impact on prices.”
Crude for July delivery increased as much as $2.54 to $86.64 a barrel in electronic trading on the New York Mercantile Exchange, and was at $86.27 at 9:43 a.m. Singapore time. The contract rose 1.1 percent last week to $84.10, the first weekly gain in six. Prices have fallen 13 percent this year.

Gold-Investment Demand in China to Advance 10%, ICBC Says (Source: Bloomberg)
Gold-investment demand in China may gain more than 10 percent this year as buyers seek a haven from Europe’s debt crisis and the prospect of weakening currencies, according to the country’s largest bullion bank. “Investors here want to hold part of their assets in gold to hedge for the risks, especially now that the financial crisis has evolved into a sovereign crisis,” Zheng Zhiguang, general manager of the precious-metals department at Industrial and Commercial Bank of China Ltd., said in an interview in Shanghai. China will topple India this year as the largest bullion market as rising incomes bolster demand, the World Gold Council forecasts. Gold may gain for a 12th year in 2012 as European policy makers strive to avoid a breakup of the euro zone and the U.S. Federal Reserve weighs more stimulus to aid the recovery. Investors in China, facing lackluster equity markets and property curbs, are looking more to the metal, Zheng said June 6.
“It’s necessary for individual, institutional or even government investors to hold gold when the value of money is decreasing at a time of possible quantitative easing or excessive money-printing practices,” said Zheng. Investment demand in China was a record 98.6 metric tons in the first quarter, 13 percent higher the same period in 2011, according to figures from the producer-funded council. Last year, it climbed 38 percent to 258.9 tons compared with 2010, as overall demand gained 20 percent to 769.8 tons. China’s total gold demand may reach 1,000 tons this year, the WGC has said.

20120611 1029 Soy Oil & Palm Oil Related News.

ITS CPO export down 6.6% to 420,592 tonnes for the period of 1~10 Jun 2012.
SGS CPO export up 1% to 426,914 tonnes for the period of 1~10 Jun 2012.

MPOB Official Data for the month of May 2012 vs Apr 2012
Exports up 4.8% to 1.4 million tonnes
Stocks down 4.5% to 1.76 million tonnes
Output up 8.7% to 1.38 million tonnes

Soybean Complex Market Recap (Source: CME)
July Soybeans finished down 3 at 1425, 14 off the high and 16 3/4 up from the low. November Soybeans closed down 12 1/4 at 1329. This was 14 up from the low and 11 1/2 off the high. July Soymeal closed up 3.6 at 429.1. This was 7.4 up from the low and 4.8 off the high. July Soybean Oil finished down 0.97 at 49.42, 0.92 off the high and 0.12 up from the low. The market saw a strong recovery from the overnight lows to the mid-session highs but November could not trade higher on the day and July slipped well off of the mid-session highs of 10 higher on the day to close lower. November was 9 1/2 cents lower late. News of more demand from China, less than expected pressure from outside market forces and a somewhat threatening forecast for the next few weeks helped to support. While traders see rain for Monday to Wednesday of next week, the coverage and amounts were reduced slightly overnight but mid-day models saw fairly decent coverage of 3/4 inches or more for the Midwest and this helped pressure late. The "much above" normal temperatures and below normal precipitation for much of the Midwest in the 11-15 day forecast models helped to provide underlying support. The USDA reported export sales of 410,000 tonnes of US soybeans to China with 60,000 on the total for old crop. In addition, Egypt was a buyer of 120,000 tonnes of US soybeans for the 2011/12 season. A surge in the US dollar and weakness in the equity markets helped to pressure overnight but into the mid-session, the US stock market turned higher on the day and this helped support the strong recovery off of the overnight lows. Strength in corn added to the positive tone but there was still profit-taking for November soybeans late to pressure.

VEGOILS-Palm oil drops as global uncertainty weighs
SINGAPORE, June 8 (Reuters) - Malaysian palm oil futures slipped, reflecting fears of a slowing commodity demand as investors looking for clear signals of further U.S. monetary stimulus were left disappointed.
"Market sentiment is still uncertain, and the palm market is tracking external factors, like what happened in Europe and China," said a trader with a foreign commodities brokerage in Malaysia.

India soybean acreage seen up 7 pct in 2012/13 -industry
MUMBAI, June 8 (Reuters) - India's soybean acreage is likely to rise by 7 percent in 2012/13 as record high prices for the oilseed prompt farmers to plant more, an industry official said on Friday, which could potentially lower edible imports and boost oilmeal exports.
Lower imports by India, the world's top buyer of edible oil, would weigh on Chicago soybean prices , which are on track to end this week with their biggest gain since October, supported by tight supplies and strong demand from China.

Palm oil and in particular palm kernel oil are essential feedstocks for the oleochemical industry which, in turn, provide critical raw materials such as fatty acids in fatty alcohols for the production of surfactants globally. Neil A Burns LLC managing partner Neil Burns says these surfactants are used in consumer products such as laundry detergents, shampoos, soaps and many other household, industrial, institutional and personal cleaning products. “In recent years, demand for these lauric oils has increased markedly and there has been substantial volatility in pricing, contributing in part to a re-arrangement and re-structuring of the oleochemicals and surfactants industries, which is still continuing,” he said. He added that currently, the surfactant industry is worth US$25bn to US$35bn (RM76.8bn to RM107.5bn) annually where 65% to 75% of the usage is in consumer cleaning such as detergents and cleaners, cosmetic and personal care products. (Starbiz)