Tuesday, December 8, 2009

20091208 1826 FCPO EOD Daily Chart Study.

A tricky day for FCPO that opened unchanged, tested the low at 2535 followed by after lunch break up that traded strongly to the high of 2590 toward the end just before the last 15 minuted sell down to closed 2 points higher at 2561. Today's doji bar candle ended near the upper Bollinger band with the band width contracting = the uptrend correction is likely to continue. MACD Histrogram registered a lower reading = buyer is not interested to add more position at this point of time. Seems like the ranging market to continue with immediate support at 2521 and resistant at 2610 level. 
When to buy : buy at support/weakness/break up with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20091208 1742 FKLI EOD Daily Chart Study.

FKLI closed 3 points higher at 1261 on par with FBMKLCI cash market with lower volume traded recovered some of the yeaterday losses. Today's small body candle bar settled near the lower Bollinger band with the band width stay nearly unchanged = market is like to trade downside biased. MACD Histrogram also remained flat = no significant action decided by both buyer and seller. There is a possible downtrend channel establishing with immediate support level at 1255.5 followed by 1251. 
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/break down with larger cut loss and profit target.

20091208 1630 DJI EOD Daily Chart Study.

The Dow stayed nearly unchanged up only 1.21 to closed at 10390.11 forming a doji bar candle again. Both Bollinger band and MACD reading still suggesting a side way range bound market. To a certain extend, Bernanke statement do eliminate some fear out of the market that is gossiping abou the possible interest hike but however, trader still preferred to stay sideline waiting for fresh lead to enter the market.

20091208 1537 FKLI Mid Day Hourly Chart Study.

FKLI recovered some of yesterday loss up 4 points to closed at 1261.5 with thin volume traded. With price trading below Bollinger band with the band width expanding = downside biased movement likely. MACD Historgram recovered higher = short seller covering up their position as market didn't turn up to be as bad as imaginated. With the mixture reading by both indicators, expecting a side way ranging market waiting to see whether buyer or seller will win the battle. 

20091208 1238 FCPO Mid Day Hourly Chart Study.

Despite higher soy oil futures price, FCPO opened unchanged and headed south in the first session down 12 points to closed at 2552 with thin volume transacted. The last hourly candle bar closed near but above the middle Bollinger band with the band width started to turned inwards = the uptrend downward correction is likely to continue. MACD Histrogram also sliding lower into the negative zone = profit taking activities still taking place. Immediate support stands at the middle Bollinger band level and resistant rest at the upper Bollinger band level.

20091208 1043 Malaysia Corporate News.

Malaysia’s palm oil stocks in November probably rose 2.8% to hit one-year highs of 2.03m tonnes as output was still higher than exports despite falling at a faster pace, a Reuters poll showed. Stocks in the world’s No. 2 producer of the vegetable oil have grown since May and have now reached their highest since November last year, a survey of five plantation houses showed. The stocks level in November covers two-thirds of Malaysia’s total storage and refining capacity – a scenario planters and traders say will not create a sell-off in the market.
  • The poll, prepared ahead of official data next week, showed output falling 14.4% to 1.7m tonnes on heavy rains hitting yields in top oil palm growing states, such as Sabah. “Stocks are growing slowly because production is higher compared to exports, but that’s not the real scenario,” said one poll respondent. “Production is falling from record levels in October because it has been hard to transport palm oil out of the estates to the refineries due to the heavy rains and floods. Water content has been rising.”
  • November’s exports inched lower to 1.45m tonnes, in what poll respondents say is fairly resilient demand from China and India in a longer-than-expected restocking exercise after festivals in August through October. (Reuters) 
This is broadly in line with our projection revealed in our plantation sector note dated 11 Nov 2009, where we estimate that palm oil stocks could rise 3% to 2.03m tonnes by end-Nov 2009. We do not expect the higher stockpile to significantly impact CPO price given that it is broadly in line with market expectations.

Sime Darby's wholly-owned unit Sime Darby Plantation had acquired palm oil grower Nature Ambience Sdn Bhd (NASB) for RM16.8m. Sime Darby said the acquisition would enable the group to develop oil palm plantations in Sarawak under the state government’s new concept of development for Native Customary Rights (NCR) land. 
  • NASB was granted approval by the state to be the investors/developer for about 26,211ha of NCR land in Kapit and Julau. “It is the intention of Sime Darby group to adopt a differentiated approach to cultivate the NCR land, which is to be developed pursuant to the NCR joint venture agreement, in compliance with the relevant guidelines issued by the Roundtable on Sustainable Palm Oil,” it added. (Starbiz)
We are not surprised by this acquisition as Sime has indicated its intention to grow its land bank. This acquisition will boost the group's land bank by 4% to 657,973 ha. Assuming Nature Ambience is debt free, we estimate Sime is paying around RM641 per ha for the raw land in Sarawak, which is attractive. However, the acquisition will not add to earnings in the immediate term given that this is a greenfield project and it takes three years for palm trees to mature.

Tan Chong International will take over the production and distribution of Mitsubishi Fuso trucks in Thailand from Jan 1, with the acquisition of assets and inventory to cost about THB1bn. Tan Chong International said it will continue to assemble Fuso trucks for Thailand at the same one million sq ft site at Lardkrabang. The acquisition is a strategic move to strengthen its presence in Thailand (an automotive manufacturing hub) and the region. (Singapore Business Times)

Pelikan International Corp hopes to hit RM150m net profit in FY10, driven by organic and inorganic growth, says President Loo Hooi Keat. On the Herlitz acquisition, he said that the acquisition would provide significant cost savings about RM100m in FY10 as Pelikan would be able to manage its cost better on better procurement power, distribution costs and higher production. Although Herlitz is loss making, Loo said the merger would give Pelikan synergistic value. (Starbiz)
This is not a new development. Loo already indicated in Nov Pelikan could generate RM100m cost savings in FY10 from this merger. We are more cautious as we believe it will take more time for management to generate the synergy and economies of scale.

South Korea, Asia's fourth-largest crude importer, plans to ban single-hulled oil tankers from entering its waters from 2011, bringing the country into line with a global drive against a ship design blamed for oil spills. The government will also cut the proportion of singlehulled vessels delivering oil in 2010 to less than 15% of the total from 22% of tankers this year, the Ministry of Land, Transport and Maritime Affairs said on Sunday in a statement. 
  • The International Maritime Organization will implement a global ban on single-hulled tankers from next year. Nations can opt out until 2015. The Port of Fujairah, the biggest refuelling centre for ships in the Middle East, said last month it will ban single-hulled oil tankers from next year. (Bloomberg)
The phasing out of single-hull tankers will help the Very Large Crude Carrier sector recover by improving the supply-demand balance. However, the key rerating catalyst will still be OPEC’s output decisions. OPEC members recently hinted that output will remain unchanged as the oil price is in the right range.

The stock market is not suffering from a crisis of confidence and this is evident from the 48% improvement in Bursa Malaysia's performance since the stimulus package and market liberalisation policies were introduced by the prime minister, the Dewan Rakyat was told yesterday. 
  • Deputy Finance Minister Datuk Wira Chor Chee Heung said against the backdrop of the global economic crisis, the benchmark FBM KLCI, which dipped to below 800 points in Octover last year, has recovered to around 1,250 points. He was confident the market would improve and that the index would test the 1,400 level next year. (NST) 
Financial magazine Asiamoney has named chief executive of CIMB Group Dato’ Sri Nazir Razak Malaysia’s best executive in 2009. The magazine said Dato' Sri Nazir had a proven track record of success and an ability to hire the best people with his own knowledge and vision. (StarBiz)

Telekom Malaysia will provide open access to its highspeed broadband (HSBB) network to third parties that add value to end customers, said its CEO Datuk Zam Isa. "What we don't want to see is value destruction. We are not inclined to want to offer access to a party that merely buys a block of bandwidth from us and resells that to the end user." Zam declined to confirm whether terms and conditions of open access had been agreed between TM and the regulator. Many industry players are concerned that HSBB's open access may not be on reasonable terms. Zam said that TM will announce the terms and conditions of its HSBB open access in due time. (StarBiz)

Packet One Networks (Malaysia) (P1), the country's leading WiMAX telecommunications company, has recorded its highest ever new net subscriber add in a quarter. New net subscriber number grew from 25,000 in 2Q09 to over 36,000 subscribers in 3Q09, up 44%. P1 said its much talked about "Potong" advertising and promotion campaign launched 15 months ago has been a contributing factor to the growth in 3Q09. Its subscriber base now stands at over 100,000 (BT).

Perusahaan Otomobil Kedua (Perodua) expects sales of Myvi to decline by up to 18% next year, as some of the potential customers for the three-year-old Myvi may opt for the recently-launched multi-purpose vehicle, Alza. 
  • "We expect some cannibalisation between Myvi and Alza, 15-18% of Myvi customers will likely go for Alza," said MD Datuk Syed Abdull Hafiz Syed Abu Bakar. Despite the potential cannibalisation, sales of compact cars Myvi and ViVa remained strong, Hafiz said. "The Myvi and ViVa have registered bookings close to 10,000 units and 7,700 units in Nov.
  • We are very encouraged by the strong demand for the models," said Hafiz. The Alza, which was launched last month, has received total bookings of some 11,000 units, with a waiting period of two months. Perodua is expected to sell some 4,000 units of Alza a month next year when it beefs up its production.
  • It expects to sell 176,000 units of vehicles next year, which would be a record number. It also expects to increase its market share to 33.3%, with the help of new models like Alza and two facelift models next year. "We expect 2010 to be the best year ever for Perodua, in terms of registration," Hafiz said. (BT)
Toyota Motor Corporation has responded positively to a suggestion that it assemble, in Malaysia, several models the automaker currently assembles in other countries. "We have requested that they consider assembly of some models (in Malaysia), especially those done in Thailand. We have received quite a positive response," Deputy Prime Minister Tan Sri Muhyiddin Yassin said. Toyota Motor, is expected to announce the outcome of a market study done in Malaysia within six months. (Bernama)

Danaharta and two of its subsidiaries won a case against Tan Sri Tajuddin Ramli in the Kuala Lumpur High Court yesterday. In the judgment, the court awarded a sum of RM589.1m as at December 31, 2005 to Danaharta, together with interest thereon at the rate of 2% above the BLR of Malayan Banking until the date of full realisation. The High Court had, prior to the event, also approved its application to strike out Tajuddin's counterclaim of damages against the three Danaharta companies and 23 other defendants. The case arose after Tajuddin executed a facility agreement on July 13, 1994 to borrow RM1.79bn from a group of syndicated lenders to finnace his purchase of a 32% stake in Malaysia Airlines. (NST)

AirAsia expects to secure the rights to fly to Sydney and Seoul by the middle of next year, says CEO Tony Fernandes. 
  • "The Koreans are very keen for us to fly there. Every other week the Incheon International Airport is asking us when we are going to fly into the airport."
  • Fernandes said the airline was also beefing up its presence in India, with some 12 additional destinations to be launched in the first half of next year. They include Hyderabad, Bangalore, Mumbai and New Delhi.
  • Meanwhile, Fernandes defended the airline's decision to impose a RM5 convenience fee on payment made using a credit card, saying it was only right that passengers pay for the high cost of maintaining credit card payment channels due to fraud. "When we started, we pushed people to do their bookings on the Internet. Now, we are just pushing them to use other payment channels which are the lowest-cost providers, like Maybank2u and CIMB Clicks, for their tickets," he said. (BT)
AirAsia is offering all-in fares starting from as low as RM8 for domestic flights and from RM25 for international flights in conjunction with its eighth year anniversary celebrations and achievements, for travel between 5 Jul and 30 Oct 2010. 
  • The special fares are for flights to destinations including Kuala Lum-pur, Singapore, Bangkok, Jakarta, Bali, Phuket, Taipei, Hanoi, Trichy, Abu Dhabi, Macau, Hong Kong and others.
  • On another matter, Fernandes said the airline’s website airasia.com had attracted 20m unique visitors per month with its blogsite blog.airasia.com, ranking it as the world’s second most popular blog site by an airline. AirAsia’s facebook at facebook.airasia.com has a fan base of some 100,000 since it was launched nine months ago. (Star)
Singapore Airlines (SIA) yesterday clarified that it has no plans to stop servicing the popular Singapore-Kuala Lumpur route. Its Peninsular Malaysia, general manager, Andrew Yip Hon Mun, said SIA will be converting one of the existing daily Singapore-Kuala Lumpur services to SilkAir operations, the regional wing of SIA, from January 2010 in a move to optimise resources within the group. 
  • "However, the overall frequency of the group's flights to and from Kuala Lumpur will remain unchanged with 17 weekly frequencies operated by Singapore Airlines and 37 by SilkAir," Yip said (Bernama)
Malaysian timber products export declined 17.9% yoy to RM13.95bn for Jan-Sep09 period, said the Malaysia Timber Industry Board (MTIB). The decline in export value was seen for sawntimber, plywood as well as timber furniture. In 2008, export of timber and timber products rose 0.1% to RM22.79bn due to relatively firmer exports in 2H08 despite weaker demand in the international market, it said. 
  • In another development, Deputy Minister of Plantation Industries and Commodities Datuk Hamzah Zainudin said players in the timber industry should equip themselves with the latest technologies and continue to be competitive at a global level.(Bernama)
Retailers in malls are expected to see higher sales of up to 10% this year, as the economic recovery translates into higher spending, says Malaysian Association for Shopping and Highrise Complex Management president Joyce Yap. However, they may see sales growth taper off and return to 2008 single-digit growth of 3-4% next year due to a high base effect and in the wake of the recent Dubai debt crisis. 
  • "This year's sales (for retailers within shopping complexes) have grown, we expect that on average the sales will grow by between 7-10% this year", says Joyce. She attributed the anticipated growth to higher traffic at malls, which has increased 12-15% yoy. Nevertheless, a higher patronage level does not necessarily mean more spending, she said. Consumers' shopping trends have changed and they are spending more prudently unlike the previous years. (BT)
The Emkay group of companies, controlled by property tycoon Tan Sri Mustapha Kamal Abu Bakar, has secured a RM120m loan from RHB Islamic Bank to finance its green development project in Cyberjaya, Selangor. The project, financed through RHB Islamic's Istisna Ijarah term financing is expected to be completed by early 2011. 
  • Total estimated construction and related cost of the new building is RM151.4m, which houses five levels of office space and three levels of sub-basement parking lots. It will be the first in Malaysia to have the Leadership in Energy and Environment Design (LEED) gold certification. It will also be the first green building for Cyberjaya. (BT)
The Star Online (thestar.com.my) was ranked third most preferred website by marketers in Malaysia, according to the inaugural Online Media of the Year 2009 survey conducted by Advertising + Marketing magazine. “The Star Online impressed in our survey despite the domination of Internet giant Google,’’ the magazine said. The Star Online was the highest ranking local website in the survey. (Star)

Leader Universal Holdings’ JV company has appointed Messrs China Huadian Engineering Co Ltd as the turnkey contractor to undertake the engineering, procurement and construction works for the 100MW coal-fired power plant project in Sihanoukville, Cambodia. (BT)

CB Industrial Product Holdings's (CBIP) subsidiary, Modipalm Engineering Sdn Bhd, has been awarded a contract worth RM29.2m by PT Bhumireksa Nusasejati to build a palm oil mill in Indonesia. CBIP said the contract was for the execution and completion of the design, construction, installation, testing and guarantee of performance of a 45-tonnesper-hour palm oil mill in Mandah. Bhumireksa is a unit of PT Minamas Plantation, which in turn, is a subsidiary of Sime Darby Group. (Financial Daily)

OCBC Bank (Malaysia) saw its loans to SMEs grow by almost 30% yoy as at end-Sep 09 and expects the upward trend to continue next year. Its head of retail commercial banking, Wong Chee Seng, said the future continues to look bright for SMEs, especially with the recent introduction of the SME Assistance Guarantee Scheme (SME AGS) by Credit Guarantee Corp (CGC). "Through the SME AGS, which was introduced earlier this year, we have already approved loans to the tune of over RM300m involving more than 2,000 borrowers,” he said. (BT)