FCPO last looked : 2912, changed : -78 points, volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histogram : falling, seller in advantage.
Support : 2970, 2950, 2920, 2900, 2850, 2800, 2770 level.
Resistance : 2920, 2950, 2970, 3020, 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed plunged lower again with increasing volume transacted. Soy oil currently falling more than 2% after overnight recorded more than 1% loss while crude oil price currently rebounding upward after yesterday severe falls.
Slower exports concern and U.S. rain forecasts report sent FCPO hitting 5 week low ahead of tomorrow export data.
Daily technical chart study revised to calling a downside biased market development with possible pullback correction.
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.
Tuesday, July 24, 2012
20120724 1720 FKLI EOD Daily Chart Study.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : falling lower, buyer taking profit.
Support : 1630, 1623, 1615, 1600 level.
Resistance : 1640, 1650, 1660, 1670 level.
Comment :
FKLI ended lower for the 3rd day with increasing volume distributed doing 3.5 points discount compare to cash market that also declined little lower. Overnight U.S. markets closed weaker and today Asia markets having mixed development while European markets currently drifting between gains and losses.
Global market reacted mixed on news on Moody's cut Germany's credit outlook, China private survey showed China’s manufacturing may contract at a slower pace this month and missed estimates reports on French manufacturing and business confidence. Back home, market will focus closely on tomorrow IHH debut performance.
Daily chart reading remained suggesting a pullback correction upside biased market development testing immediate support near middle Bollinger band with MACD indicator having negative crossed down.
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.
20120724 1659 Regional Markets EOD Daily Chart Study.
DJIA chart reading : side way range bound.
Hang Seng chart reading : side way range bound.
KLCI chart reading : pullback correction upside biased.
20120724 1558 Global Markets & Commodities Related News.
GLOBAL MARKETS: Asian shares inched higher, helped by improving Chinese manufacturing data, but the euro remained under pressure as surging Spanish borrowing costs stoked fears that the euro zone's fourth-largest economy will be forced to seek a bailout. European stocks were set to open mixed following a sharp two-session drop, with data showing rising manufacturing output in top metals consumer China set to provide support to commodity-related shares, while Moody's warning on Germany's credit rating was set to weigh on the country's stock market. U.S. stocks fell for a second straight session on Monday, as Spain appeared closer to needing a national bailout and poor corporate results weighed on the market.
China flash PMI at 5-mth peak on output bounce
China's flash factory purchasing managers index rose in July to its highest level since February, boosted by a pick up in output and signs of improvement in new export orders that offered relief to struggling financial markets.
FOREX: The euro steadied against the yen and the U.S. dollar in Asia, as investors' risk appetite perked up after data showed signs of improvement in China's manufacturing output.
FOREX-Euro steadies after China PMI, Aussie perks up
TOKYO, July 24 (Reuters) - The euro steadied against the yen and the U.S. dollar in Asia on Tuesday, as investors' risk appetite perked up after data showed signs of improvement in China's manufacturing output.
China's manufacturing output in July grew at its fastest pace in nine months which offered some relief amid mounting worries that Spain, the euro zone's fourth-largest economy, may need to seek a bailout.
Some US crops get welcome drink amid devastating drought
Rain will fall early this week in the northern U.S. Midwest, with from 1 to 2 inches expected across a broad parched swath of corn and soybean land roughly north of Interstate 80, an agricultural meteorologist predicted Monday.
GRAINS: Chicago corn slipped more than 2 percent and soybeans slid more than 3 percent, extending losses from the previous session, on forecasts for rains over some regions of the drought-hit U.S. Midwest.
POLL-US crude stocks forecast flat, gasoline lower
U.S. commercial crude oil stockpiles were forecast unchanged for the week to July 20 as a fall in imports was offset by lower utilization rates, while gasoline inventories were forecast to have dipped slightly, a preliminary Reuters poll showed on Monday.
OIL: Brent crude climbed above $104 per barrel as China, the world's top energy consumer, showed signs of improvement in its economy though fears of a Spanish bailout curbed gains.
Indonesia June exports of nickel, copper ore slump - govt
JAKARTA, July 24 (Reuters) - Indonesia's June exports of nickel and copper ores and concentrates slumped up to 90 percent, trade ministry data said on Tuesday, showing that new government mining rules have hurt shipments from a major metals supplier to China.
Exports of nickel ore, a raw material used in the production of stainless steel, dropped to 572,106 tonnes in June, down 80 percent from 2,851,924 tonnes in May, the data showed.
China's BOCI to trade on the LME from July 25
LONDON, July 23 (Reuters) - BOCI Global Commodities, a unit of the Bank of China , will begin trading and clearing as an associate member of the London Metal Exchange (LME) later this week, the exchange said on Monday.
BOCI Global Commodities will commence operations as a Category 2 member of the exchange from July 25. Category 2 members, or associate broker clearing members, are able to trade on the LME's electronic platforms and the telephone market but may not trade in the ring.
London Metal Exchange takeover vote a close call -survey
LONDON, July 23 (Reuters) - With the fate of the world's largest metals marketplace due to be decided in two days, London Metal Exchange shareholders are taking the 1.4 billion pound ($2.2 billion) decision on a sale to Hong Kong stock exchange down to the wire.
A Reuters survey showed that while half of respondents were clearly in favour of the deal, some smaller industrial users of metals such as copper, aluminium and nickel were against or had not made up their minds and, crucially, some heavyweight stakeholders were still undecided.
COLUMN-Global steel output still running too hot
--Andy Home is a Reuters columnist. The opinions expressed are his own--
LONDON, July 23 (Reuters) - Global steel production fell by 0.1 percent year-on-year in June, according to the latest figures from the World Steel Association.
The negative headline figure was the culmination of a trend of slowing growth that has been apparent since March of this year.
London Metal Exchange takeover vote a close call –survey
With the fate of the world's largest metals marketplace due to be decided in two days, London Metal Exchange shareholders are taking the 1.4 billion pound ($2.2 billion) decision on a sale to Hong Kong stock exchange down to the wire.
China's BOCI to trade on the LME from July 25
BOCI Global Commodities, a unit of the Bank of China , will begin trading and clearing as an associate member of the London Metal Exchange later this week, the exchange said on Monday.
BASE METALS: London copper rose on short covering ahead of the release of data on Chinese factory activity, rebounding from a near one-month low in the prior session on worries that Spain's debt problems will undermine global demand for metals.
PRECIOUS METALS: Gold held steady above a 1-1/2 week low near $1,560 an ounce hit in the previous session, although deepening worries on the euro zone debt crisis kept prices under pressure.
METALS-Copper up on China PMI data; euro zone crisis to cap gains
SHANGHAI, July 24 (Reuters) - London copper rebounded on Tuesday after better-than-expected July manufacturing output in top metals consumer China temporarily offset investor worries that Spain's debt problems would undermine global demand for metals.
The HSBC Flash China manufacturing purchasing managers index (PMI) rose to 49.5 in July from 48.2 in June, growing at the fastest pace in nine months and nearing the 50 level that divides expansion from contraction.
PRECIOUS-Gold steady but euro zone worries weigh
SINGAPORE, July 24 (Reuters) - Gold held steady on Tuesday above a 1-1/2 week low near $1,560 an ounce hit in the previous session, although deepening worries on the euro zone debt crisis kept prices under pressure.
Concerns about Spain's finances were rekindled after a number of regions in the country sought help from Madrid, while Moody's Investors Service changed its outlook for Germany, the Netherlands and Luxembourg to negative from stable.
China flash PMI at 5-mth peak on output bounce
China's flash factory purchasing managers index rose in July to its highest level since February, boosted by a pick up in output and signs of improvement in new export orders that offered relief to struggling financial markets.
FOREX: The euro steadied against the yen and the U.S. dollar in Asia, as investors' risk appetite perked up after data showed signs of improvement in China's manufacturing output.
FOREX-Euro steadies after China PMI, Aussie perks up
TOKYO, July 24 (Reuters) - The euro steadied against the yen and the U.S. dollar in Asia on Tuesday, as investors' risk appetite perked up after data showed signs of improvement in China's manufacturing output.
China's manufacturing output in July grew at its fastest pace in nine months which offered some relief amid mounting worries that Spain, the euro zone's fourth-largest economy, may need to seek a bailout.
Some US crops get welcome drink amid devastating drought
Rain will fall early this week in the northern U.S. Midwest, with from 1 to 2 inches expected across a broad parched swath of corn and soybean land roughly north of Interstate 80, an agricultural meteorologist predicted Monday.
GRAINS: Chicago corn slipped more than 2 percent and soybeans slid more than 3 percent, extending losses from the previous session, on forecasts for rains over some regions of the drought-hit U.S. Midwest.
POLL-US crude stocks forecast flat, gasoline lower
U.S. commercial crude oil stockpiles were forecast unchanged for the week to July 20 as a fall in imports was offset by lower utilization rates, while gasoline inventories were forecast to have dipped slightly, a preliminary Reuters poll showed on Monday.
OIL: Brent crude climbed above $104 per barrel as China, the world's top energy consumer, showed signs of improvement in its economy though fears of a Spanish bailout curbed gains.
Indonesia June exports of nickel, copper ore slump - govt
JAKARTA, July 24 (Reuters) - Indonesia's June exports of nickel and copper ores and concentrates slumped up to 90 percent, trade ministry data said on Tuesday, showing that new government mining rules have hurt shipments from a major metals supplier to China.
Exports of nickel ore, a raw material used in the production of stainless steel, dropped to 572,106 tonnes in June, down 80 percent from 2,851,924 tonnes in May, the data showed.
China's BOCI to trade on the LME from July 25
LONDON, July 23 (Reuters) - BOCI Global Commodities, a unit of the Bank of China , will begin trading and clearing as an associate member of the London Metal Exchange (LME) later this week, the exchange said on Monday.
BOCI Global Commodities will commence operations as a Category 2 member of the exchange from July 25. Category 2 members, or associate broker clearing members, are able to trade on the LME's electronic platforms and the telephone market but may not trade in the ring.
London Metal Exchange takeover vote a close call -survey
LONDON, July 23 (Reuters) - With the fate of the world's largest metals marketplace due to be decided in two days, London Metal Exchange shareholders are taking the 1.4 billion pound ($2.2 billion) decision on a sale to Hong Kong stock exchange down to the wire.
A Reuters survey showed that while half of respondents were clearly in favour of the deal, some smaller industrial users of metals such as copper, aluminium and nickel were against or had not made up their minds and, crucially, some heavyweight stakeholders were still undecided.
COLUMN-Global steel output still running too hot
--Andy Home is a Reuters columnist. The opinions expressed are his own--
LONDON, July 23 (Reuters) - Global steel production fell by 0.1 percent year-on-year in June, according to the latest figures from the World Steel Association.
The negative headline figure was the culmination of a trend of slowing growth that has been apparent since March of this year.
London Metal Exchange takeover vote a close call –survey
With the fate of the world's largest metals marketplace due to be decided in two days, London Metal Exchange shareholders are taking the 1.4 billion pound ($2.2 billion) decision on a sale to Hong Kong stock exchange down to the wire.
China's BOCI to trade on the LME from July 25
BOCI Global Commodities, a unit of the Bank of China , will begin trading and clearing as an associate member of the London Metal Exchange later this week, the exchange said on Monday.
BASE METALS: London copper rose on short covering ahead of the release of data on Chinese factory activity, rebounding from a near one-month low in the prior session on worries that Spain's debt problems will undermine global demand for metals.
PRECIOUS METALS: Gold held steady above a 1-1/2 week low near $1,560 an ounce hit in the previous session, although deepening worries on the euro zone debt crisis kept prices under pressure.
METALS-Copper up on China PMI data; euro zone crisis to cap gains
SHANGHAI, July 24 (Reuters) - London copper rebounded on Tuesday after better-than-expected July manufacturing output in top metals consumer China temporarily offset investor worries that Spain's debt problems would undermine global demand for metals.
The HSBC Flash China manufacturing purchasing managers index (PMI) rose to 49.5 in July from 48.2 in June, growing at the fastest pace in nine months and nearing the 50 level that divides expansion from contraction.
PRECIOUS-Gold steady but euro zone worries weigh
SINGAPORE, July 24 (Reuters) - Gold held steady on Tuesday above a 1-1/2 week low near $1,560 an ounce hit in the previous session, although deepening worries on the euro zone debt crisis kept prices under pressure.
Concerns about Spain's finances were rekindled after a number of regions in the country sought help from Madrid, while Moody's Investors Service changed its outlook for Germany, the Netherlands and Luxembourg to negative from stable.
20120724 1452 Soy Oil & Crude Palm Oil Related News.
VEGOILS: Palm oil hits five-week low on U.S. rain forecasts - Reuters
24-Jul-2012 13:33
Forecast for rains in the U.S. raised soybean outlook Prices touch a low of 2,924 ringgit, lowest since June 19 Palm oil faces support at 2,919 ringgit -technicals Coming up: Malaysian palm exports for July 1-25 on Wednesday
By Chew Yee Kiat
SINGAPORE, July 24 (Reuters) - Malaysian crude palm oil futures dropped to the lowest in five weeks on Tuesday, extending losses from the previous day as forecast for rains in the U.S. Midwest improved production outlooks for soybeans.
An improved production outlook for soybeans could see a higher supply of competing soybean oil, narrowing its premium to palm oil and attracting some demand away from the tropical oil.
A gloomy global economic outlook also weighed on palm oil and other commodity markets with a surge in Spain's
On top of that, a surge in Spain's borrowing costs triggering alarms that the country could seek a costly bailout also piled pressure on palm oil prices.
"Prices are reflecting macroeconomic risk aversion but technically palm prices are terribly oversold," said a trader with a local commodities brokerage in Malaysia.
"Prices have again became attractive and exports should soon show signs of recovery. Consumers will soon bargain hunt as prices are relatively cheap."
By the midday break, the benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange were trading 1.3 percent lower at 2,951 ringgit ($930) per tonne after going as low as 2,924 ringgit, the lowest since June 19.
Traded volume stood at 16,369 lots of 25 tonnes each, higher than the usual 12,500 lots.
On the technicals front, palm oil faces a support at 2,919 ringgit, a break below which will open the way to 2,838 ringgit, said Reuters market analyst Wang Tao. (Full Story)
Weather updates on Monday forecast some rains for soybean crops in U.S. Midwest this week and helped offset a weekly crop condition report from the U.S. Department of Agriculture that downgraded soy crop ratings. (Full Story) (Full Story)
Investor sentiment also weakened as the euro was not far from a two-year low against the dollar, undermined by Moody's Investors Service changing its ratings outlook to negative for Aaa-rated Germany, the Netherlands and Luxembourg amid Europe's ongoing debt crisis. (Full Story)
Palm oil traders will be looking out for Malaysia's palm oil export data for the July 1-25 period to be released on Wednesday after shipments fell 23 percent over the first 20 days of July from a month ago. PALM/ITS PALM/SGS
The market is also watching for signs of El Nino returning to Southeast Asia as the hot and dry weather could hurt palm oil output for top producers Indonesia and Malaysia.
In other markets, Brent crude remained steady above $103 per barrel on Tuesday as China, the world's top energy consumer, showed signs of improvement in its economy though fears of a Spanish bailout curbed oil price gains. O/R
Declines in other vegetable oil markets showed similar investors concerns over wetter weather in the U.S. and the euro zone debt crisis.
By 0452 GMT, the most active U.S. soyoil for December BOZ2 delivery was down 2.2 percent and the most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange had lost 2.4 percent.
24-Jul-2012 13:33
Forecast for rains in the U.S. raised soybean outlook Prices touch a low of 2,924 ringgit, lowest since June 19 Palm oil faces support at 2,919 ringgit -technicals Coming up: Malaysian palm exports for July 1-25 on Wednesday
By Chew Yee Kiat
SINGAPORE, July 24 (Reuters) - Malaysian crude palm oil futures dropped to the lowest in five weeks on Tuesday, extending losses from the previous day as forecast for rains in the U.S. Midwest improved production outlooks for soybeans.
An improved production outlook for soybeans could see a higher supply of competing soybean oil, narrowing its premium to palm oil and attracting some demand away from the tropical oil.
A gloomy global economic outlook also weighed on palm oil and other commodity markets with a surge in Spain's
On top of that, a surge in Spain's borrowing costs triggering alarms that the country could seek a costly bailout also piled pressure on palm oil prices.
"Prices are reflecting macroeconomic risk aversion but technically palm prices are terribly oversold," said a trader with a local commodities brokerage in Malaysia.
"Prices have again became attractive and exports should soon show signs of recovery. Consumers will soon bargain hunt as prices are relatively cheap."
By the midday break, the benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange were trading 1.3 percent lower at 2,951 ringgit ($930) per tonne after going as low as 2,924 ringgit, the lowest since June 19.
Traded volume stood at 16,369 lots of 25 tonnes each, higher than the usual 12,500 lots.
On the technicals front, palm oil faces a support at 2,919 ringgit, a break below which will open the way to 2,838 ringgit, said Reuters market analyst Wang Tao. (Full Story)
Weather updates on Monday forecast some rains for soybean crops in U.S. Midwest this week and helped offset a weekly crop condition report from the U.S. Department of Agriculture that downgraded soy crop ratings. (Full Story) (Full Story)
Investor sentiment also weakened as the euro was not far from a two-year low against the dollar, undermined by Moody's Investors Service changing its ratings outlook to negative for Aaa-rated Germany, the Netherlands and Luxembourg amid Europe's ongoing debt crisis. (Full Story)
Palm oil traders will be looking out for Malaysia's palm oil export data for the July 1-25 period to be released on Wednesday after shipments fell 23 percent over the first 20 days of July from a month ago. PALM/ITS PALM/SGS
The market is also watching for signs of El Nino returning to Southeast Asia as the hot and dry weather could hurt palm oil output for top producers Indonesia and Malaysia.
In other markets, Brent crude remained steady above $103 per barrel on Tuesday as China, the world's top energy consumer, showed signs of improvement in its economy though fears of a Spanish bailout curbed oil price gains. O/R
Declines in other vegetable oil markets showed similar investors concerns over wetter weather in the U.S. and the euro zone debt crisis.
By 0452 GMT, the most active U.S. soyoil for December BOZ2 delivery was down 2.2 percent and the most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange had lost 2.4 percent.
20120724 1112 Global Markets & Commodities Related News.
GLOBAL MARKETS-Shares, euro capped on Spain contagion fears, China PMI eyed
TOKYO, July 24 (Reuters) - Asian shares were capped after the previous day's deep losses as a surge in Spain's borrowing costs, to levels seen as unsustainable, triggered alarms indebted regions could push the euro zone's fourth-largest economy to seek a bailout.
"Rising yields are in turn adding to a sense of crisis: If the regions ask for cash, how will the government fund itself? The brave Spanish matador appears to be pinned to the perimeter fence by the angry bull," Wilkinson said.
COMMODITIES-Oil slides on Spain worry; grains slip on rain watch
NEW YORK, July 23 (Reuters) - Oil prices suffered their sharpest decline in a month on Monday, sliding 4 percent, and profit-taking also hit metals and other commodities after fear that Spain was headed for a bailout the euro zone couldn't afford.
"There are fears this could be the beginning of a domino effect, which ultimately leads to Spain having to join Greece, Portugal and Ireland in asking for an official rescue," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
Nexen buy moves China into heart of global oil benchmark
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, July 23 (Reuters) - Chinese state-backed oil producer CNOOC Ltd will get more than just more crude oil assets with its $15.1 billion takeover of Canada's Nexen Inc .
The acquisition will also move CNOOC into the heart of the North Sea BFOE physical oil benchmark, giving a Chinese company for the first time unprecedented insight and access into this secretive, yet enormously influential market.
OIL-Oil falls, pressured by Spain, euro zone worries
NEW YORK, July 23 (Reuters) - Oil prices fell sharply on Monday, down a second straight day, a s worries that Spain is headed for a bailout and the euro zone debt crisis is spreading prompted investors to sell assets perceived as risky, boosting the dollar and U.S. debt.
"There are fears this could be the beginning of a domino effect, which ultimately leads to Spain having to join Greece, Portugal and Ireland in asking for an official rescue," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
POLL-US crude stocks forecast flat, gasoline lower
July 23 (Reuters) - U.S. commercial crude oil stockpiles were forecast unchanged for the week to July 20 as a fall in imports was offset by lower utilization rates, while gasoline inventories were forecast to have dipped slightly, a preliminary Reuters poll showed on Monday.
Three analysts projected a rise while the other three expected a drawdown. In the week to July 13, stockpiles fell 809,000 barrels to 377.39 million barrels, data released by the EIA showed, while crude imports rose 311,000 barrels per day to 8.9 million bpd.
Asian dealmaking livens up dim oil earnings season
July 23 (Reuters) - A surprising $15 billion deal struck by China's CNOOC Ltd for a Canadian outfit operating in the backyards of the world's biggest oil companies could provide a key talking point as the majors report what will likely be subdued quarterly earnings.
Sustained production growth has long been elusive for the likes of Exxon Mobil Corp and Royal Dutch Shell Plc . CNOOC's proposed Nexen Inc takeover at a hefty 61 percent premium, announced earlier on Monday, sets an alarming benchmark for anyone seeking to buy their way into opportunities.
Nigeria's oil exports set to fall to 11-month low
GENEVA, July 23 (Reuters) - Top African oil producer Nigeria's loadings are set to fall to 1.81 million barrels per day (bpd) in September, a provisional loading programme showed on Monday, leaving exports at an 11-month low.
The OPEC producer's exports have mostly been around 2 million bpd so far this year, helped by the new Usan grade which began production in February.
NATURAL GAS-US natgas futures end up for 4th day, front at 7-mth high
NEW YORK, July 23 (Reuters) - U.S. natural gas futures ended higher on Monday for a fourth straight session, with bullish technicals and still-warm forecasts for the Northeast and Midwest driving the front-month contract to a seven-month high.
"The warmer than normal weather has helped, but we're seeing continued upside after breaking the January high and the 200-day moving average," said Matt Smith, commodity analyst at Summit Energy in Kentucky.
EURO COAL-Coal falls with world markets, China quiet
LONDON, July 23 (Reuters) - Physical prompt coal prices softened slightly on Monday on weaker oil and macro anxieties, traders and utilities said.
"Coal is doing what it usually does when there are few, clear signals, it looks at macro factors such as China, euro zone crisis and oil," one European trader said.
TOKYO, July 24 (Reuters) - Asian shares were capped after the previous day's deep losses as a surge in Spain's borrowing costs, to levels seen as unsustainable, triggered alarms indebted regions could push the euro zone's fourth-largest economy to seek a bailout.
"Rising yields are in turn adding to a sense of crisis: If the regions ask for cash, how will the government fund itself? The brave Spanish matador appears to be pinned to the perimeter fence by the angry bull," Wilkinson said.
COMMODITIES-Oil slides on Spain worry; grains slip on rain watch
NEW YORK, July 23 (Reuters) - Oil prices suffered their sharpest decline in a month on Monday, sliding 4 percent, and profit-taking also hit metals and other commodities after fear that Spain was headed for a bailout the euro zone couldn't afford.
"There are fears this could be the beginning of a domino effect, which ultimately leads to Spain having to join Greece, Portugal and Ireland in asking for an official rescue," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
Nexen buy moves China into heart of global oil benchmark
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, July 23 (Reuters) - Chinese state-backed oil producer CNOOC Ltd will get more than just more crude oil assets with its $15.1 billion takeover of Canada's Nexen Inc .
The acquisition will also move CNOOC into the heart of the North Sea BFOE physical oil benchmark, giving a Chinese company for the first time unprecedented insight and access into this secretive, yet enormously influential market.
OIL-Oil falls, pressured by Spain, euro zone worries
NEW YORK, July 23 (Reuters) - Oil prices fell sharply on Monday, down a second straight day, a s worries that Spain is headed for a bailout and the euro zone debt crisis is spreading prompted investors to sell assets perceived as risky, boosting the dollar and U.S. debt.
"There are fears this could be the beginning of a domino effect, which ultimately leads to Spain having to join Greece, Portugal and Ireland in asking for an official rescue," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
POLL-US crude stocks forecast flat, gasoline lower
July 23 (Reuters) - U.S. commercial crude oil stockpiles were forecast unchanged for the week to July 20 as a fall in imports was offset by lower utilization rates, while gasoline inventories were forecast to have dipped slightly, a preliminary Reuters poll showed on Monday.
Three analysts projected a rise while the other three expected a drawdown. In the week to July 13, stockpiles fell 809,000 barrels to 377.39 million barrels, data released by the EIA showed, while crude imports rose 311,000 barrels per day to 8.9 million bpd.
Asian dealmaking livens up dim oil earnings season
July 23 (Reuters) - A surprising $15 billion deal struck by China's CNOOC Ltd for a Canadian outfit operating in the backyards of the world's biggest oil companies could provide a key talking point as the majors report what will likely be subdued quarterly earnings.
Sustained production growth has long been elusive for the likes of Exxon Mobil Corp and Royal Dutch Shell Plc . CNOOC's proposed Nexen Inc takeover at a hefty 61 percent premium, announced earlier on Monday, sets an alarming benchmark for anyone seeking to buy their way into opportunities.
Nigeria's oil exports set to fall to 11-month low
GENEVA, July 23 (Reuters) - Top African oil producer Nigeria's loadings are set to fall to 1.81 million barrels per day (bpd) in September, a provisional loading programme showed on Monday, leaving exports at an 11-month low.
The OPEC producer's exports have mostly been around 2 million bpd so far this year, helped by the new Usan grade which began production in February.
NATURAL GAS-US natgas futures end up for 4th day, front at 7-mth high
NEW YORK, July 23 (Reuters) - U.S. natural gas futures ended higher on Monday for a fourth straight session, with bullish technicals and still-warm forecasts for the Northeast and Midwest driving the front-month contract to a seven-month high.
"The warmer than normal weather has helped, but we're seeing continued upside after breaking the January high and the 200-day moving average," said Matt Smith, commodity analyst at Summit Energy in Kentucky.
EURO COAL-Coal falls with world markets, China quiet
LONDON, July 23 (Reuters) - Physical prompt coal prices softened slightly on Monday on weaker oil and macro anxieties, traders and utilities said.
"Coal is doing what it usually does when there are few, clear signals, it looks at macro factors such as China, euro zone crisis and oil," one European trader said.
20120724 1027 Malaysia Corporate Related News.
Prime Minister Datuk Seri Najib Tun Abdul Razak presented Felda Group zakat (tithe) payment for the year 2011 amounting to RM30.6m to 14 state zakat collection centres here. The zakat comprised the payment of RM10m (as interim payment of tithe for half-year profit) from Felda Global Ventures Holdings, RM15.6m from Felda Holdings Berhad and RM5m from Felda Investment Cooperative. The zakat were presented to the centres through Menteris Besar, Chief Ministers and state Islamic religious councils at the breaking of fast event at Seri Perdana here. (Starbiz)
At least six companies are expected to submit their business plans to the Malaysian Communications and Multimedia Commission (MCMC) today, to bid for the rights to be the common integrated infrastructure provider (CIIP) for the rolling out of digital terrestrial television broadcasting (DTTB). The entire cost of the project, including the cost of subsidising set-top boxes, is expected to be around RM900m (RM600m rollout and RM300m set-top box). “There was talk that the entire project could cost about RM2bn, but based on our estimation, we believe the cost (excluding set-top box) could potentially be much lower, perhaps in the range of RM500m-RM700m,” said an industry source familiar with the digital broadcasting industry. Based on the market talk, companies that have expressed interest in the DTTB job include Telekom Malaysia, Astro (Usaha Tegas), Sapura, Celcom Axiata, Puncak Semangat, and KUB Malaysia, with Maxis, REDtone International and YTL Group also believed to be keen in the job as well. The winner of the tender will build and operate the digital TV broadcast infrastructure for DTTB services so that all broadcasters such as RTM, Media Prima Bhd, Hijrah TV and others can ride on the infrastructure to transmit their TV programmes, radio and other online contents. "The eventual winner would need to subsidise 1m units of set-top boxes, presumably for the household of rural areas and lower-income group. The government has already announced that it would not be subsidising or partially subsidising the migration," said an industry player. (BT)
Malaysian Electronic Clearing Corp, a wholly-owned subsidiary of Bank Negara, has teamed up with three other banks and is working with another three to offer mobile banking services. It has tied up with Malayan Banking, CIMB Bank and Public Bank but will not disclose the names of the other three. Managing director Mohd Suhail Amar Suresh said it is currently piloting the mobile banking services with the first three banks in collaboration with Maxis, Celcom and Digi. (StarBiz)
Ekovest Bhd has secured two contracts worth RM253.3m to build the fourth lane along two stretches of the North-South Expressway. It said on Monday its unit Ekovest Construction Sdn Bhd had accepted two contracts from UEMB-MRCB JV Sdn Bhd (formerly known as Intria Urus Sdn Bhd) to undertake the projects. The first stretch was to build a fourth lane along a seven-km stretch between Bukit Lanjan and the Jalan Duta Toll Plaza.The second contract was to construct a fourth lane, stretching 5.2km, between the Nilai Utara interchange and Nilai. The contracts were for 24 months. (Starbiz)
AMMB Holdings has announced a final single-tier dividend of 13.5% for the financial year ended March 31. The payment date for the final dividend would be on Sept 10. (Star Biz)
Digistar Corp Bhd has proposed to undertake a private placement of up to 10% of its issued and paid-up share capital. As at July 18, the total issued share base for Digistar was 231.7m ordinary shares, with 90m outstanding warrants, it said in a filing to Bursa Malaysia yesterday. (BT)
Container handling and transshipment at Malaysian ports both saw a close to 5% rise for 1H12 with Port Klang and Tanjung Pelepas Port emerging as the busiest ports. Malaysian ports handled 10.34m teus containers for 1H12. Transshipment handling grew to 6.93m teus, from 6.61m teus. (Malaysian Reserve)
Faber Group is hoping that is hospital support services (HSS) contract with the Government will be resolved after Advance Pact Sdn Bhd had inked a 21.5 year HSS agreement for a new hospital in Kuantan last week. Based on sources, Health Ministry officials had paid a visit to Faber’s plant in Bukit Beruntung and had personally conveyed their assurance that the renewal of the HSS contract would be granted to Faber eventually. (Star Biz)
Tanjung Offshore Bhd has declared a tax-exempt special dividend, which will range from RM0.35-RM0.44. It said on Monday the final tax-exempt special dividend per share would be determined and announced on Aug 3 and the ex-date would be on Aug 9. Tanjung Offshore said based on the paid-up (excluding 2.47m treasury shares) as well as the outstanding 30.6m warrants 2006/2016; 408m warrants 2008/2013 and 4.0m options under the employees share option scheme as at June 29, the minimum and maximum amount of tax-exempt special dividend would be 35 sen and 44 sen per share. (Starbiz)
Inari Bhd plans to issue 84.2m new shares to raise RM30.3m to partly fund the acquisition of a Philippines company, Amertron Inc (Global) Ltd. Inari had on Monday signed a S&P agreement to acquire 100% of Amertron for US$32m (RM101.8m). Inari, an electronic manufacturing services (EMS) provider, will also issue 11.5m redeemable preference shares with 34.6m free five-year warrants, anticipated to raise about US$11.5m (RM36.6m). Shareholders will be entitled to two free warrants for every rights share subscribed and both these exercises would raise the 90% cash portion needed to acquire the company, said Inari Managing Director Dr Tan Seng Chuan. The remaining 10% will be also satisfied via issuance of new shares, he said, adding that the acquisition of Amertron, also an EMS company, is expected to be completed in six months. Amertron Global, which specialises in manufacturing of optoelectronic modules with final products including LED displays and fibre optic modules, owns three plants, two in the Philippines and one in China.Amertron Global President Richard Wang said the company produces 500m parts yearly and in 2011, its adjusted net tangible assets stood at US$32m, while turnover touched US$120.8m. (Bernama)
Fujitsu Malaysia is projecting a 26-30% revenue growth for the financial year ending March 31, 2013, with substantial contribution from the public sector and multinational business. Its President Charles Lew said the outlook for FY2012 is expected to be positive in Malaysia despite the softening global economy as the Japan-based technology company would focus on high-margin products and services and branding. Lew said there are new opportunities of growth, such as in the Small and Medium Enterprise (SME) business segment which Fujitsu hopes to tap into, with the adoption of cloud computing which provides more competitive costs for lower scale businesses. (Bernama)
Hyundai-Sime Darby Motors has received 5,000 bookings for its MD Elantra car since its launch on April 8. To date, 1,570 units of the car are already on Malaysian roads. The MD Elantra was also named the “Car of The Year” by Asian Auto in 2012. (Bernama)
MMC Corporation: PAAB snubs offer for JV
Pengurusan Aset Air Bhd (PAAB) confirmed that MMC Corporation has made an unsolicited offer for the two to establish a JV to own the country’s water assets. In a brief reply to questions from The Edge Financial Daily, PAAB confirmed that it attended a presentation on the possibility of co-owning the water assets by executives from MMC. However, PAAB said it is not seeking a partner to own the water assets. Nevertheless, PAAB added that there was no deadline given for it to revert to MMC on its offer. (Financial Daily)
Axiata: Likely to eye telecom license Myanmar
Market watchers said Axiata Group is likely to be eyeing a telecoms license that may be available soon in Myanmar. In a rare interview with the Financial Times a fortnight ago, Myanmar President Thein Sein named the telecoms, IT and technology sector as among areas the country would need knowledge from outside as well as foreign investment. (Financial Daily)
AirAsia: Source says low cost carrier to terminate collaboration agreement with MAS
A source says low-cost carrier AirAsia wants to opt out of all JV agreements with national carrier Malaysia Airlines (MAS). According to the source, AirAsia decided at a board meeting last week that it would seek to terminate its agreements with MAS soon. AirAsia group CEO Tan Sri Tony Fernandes said no comment when queried about the matter through text messages, while calls and text messages to AirAsia Malaysia CEO Aireen Omar went unanswered. MAS CEO Ahmad Jauhari Yahya did not respond to a text message to him. A termination of the memorandum of understandings (MOUs) between AirAsia and MAS would effectively wipe out the remnants of a deal between Khazanah Nasional Bhd and Tune Air Sdn Bhd that had gone awry. (Business Times)
Puncak Niaga: Cabinet panel rejects Selangor government bid for Syabas
The Special Cabinet Committee (SCC) on the Selangor Water Issue has rejected the proposed takeover of Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) by the Selangor government. Deputy Prime Minister Tan Sri Muhiyiddin Yasin said the takeover could not be done as the state government did not comply with the concession agreement, including allowing a water tariff hike. (Financial Daily)
Muhibbah Engineering: To diversify income streams
Muhibbah Engineering hopes to improve its recurring income base by intensifying its focus on build, operate and transfer projects in the oil and gas sector in the Asean region. The group is also looking at project management contracts (PMCs) in the oil and gas sector to reduce its reliance on contracting works, said its business development director Mac Chung Jin. He added that margins for contracting works are very cyclical these days. There is currency fluctuation when you go abroad and there is also price fluctuation. When oil price goes up, everything else does, too. Due to that, many have started to move away from being pure contractors. There are talks by Petronas to go into marginal fields, which is a good sign of positive things happening. (Business Times)
MTD ACPI Engineering: Lands contract worth RM303.2m
MTD ACPI Engineering has secured a contract worth RM303.2m to construct a fourth lane between the Sungai Buloh and Rawang interchange. In a filing Monday, the company said its unit MTD Construction Sdn Bhd had accepted the contract from UEMB-MRCB JV Sdn Bhd (formerly known as Intria Urus Sdn Bhd) on July 18. It said the contract would involve the building of a fourth lane between Sungai Buloh (km457.0) and the Rawang interchange (km443.9) package C. The company said package C comprised of all work from southbound and northbound inclusive of the drain and guardrails. MTD ACP said the contract was worth RM303.2m, including provisional sum of RM13.6m and prime cost sum of RM127m for duration of 30 months. (Financial Daily)
At least six companies are expected to submit their business plans to the Malaysian Communications and Multimedia Commission (MCMC) today, to bid for the rights to be the common integrated infrastructure provider (CIIP) for the rolling out of digital terrestrial television broadcasting (DTTB). The entire cost of the project, including the cost of subsidising set-top boxes, is expected to be around RM900m (RM600m rollout and RM300m set-top box). “There was talk that the entire project could cost about RM2bn, but based on our estimation, we believe the cost (excluding set-top box) could potentially be much lower, perhaps in the range of RM500m-RM700m,” said an industry source familiar with the digital broadcasting industry. Based on the market talk, companies that have expressed interest in the DTTB job include Telekom Malaysia, Astro (Usaha Tegas), Sapura, Celcom Axiata, Puncak Semangat, and KUB Malaysia, with Maxis, REDtone International and YTL Group also believed to be keen in the job as well. The winner of the tender will build and operate the digital TV broadcast infrastructure for DTTB services so that all broadcasters such as RTM, Media Prima Bhd, Hijrah TV and others can ride on the infrastructure to transmit their TV programmes, radio and other online contents. "The eventual winner would need to subsidise 1m units of set-top boxes, presumably for the household of rural areas and lower-income group. The government has already announced that it would not be subsidising or partially subsidising the migration," said an industry player. (BT)
Malaysian Electronic Clearing Corp, a wholly-owned subsidiary of Bank Negara, has teamed up with three other banks and is working with another three to offer mobile banking services. It has tied up with Malayan Banking, CIMB Bank and Public Bank but will not disclose the names of the other three. Managing director Mohd Suhail Amar Suresh said it is currently piloting the mobile banking services with the first three banks in collaboration with Maxis, Celcom and Digi. (StarBiz)
Ekovest Bhd has secured two contracts worth RM253.3m to build the fourth lane along two stretches of the North-South Expressway. It said on Monday its unit Ekovest Construction Sdn Bhd had accepted two contracts from UEMB-MRCB JV Sdn Bhd (formerly known as Intria Urus Sdn Bhd) to undertake the projects. The first stretch was to build a fourth lane along a seven-km stretch between Bukit Lanjan and the Jalan Duta Toll Plaza.The second contract was to construct a fourth lane, stretching 5.2km, between the Nilai Utara interchange and Nilai. The contracts were for 24 months. (Starbiz)
AMMB Holdings has announced a final single-tier dividend of 13.5% for the financial year ended March 31. The payment date for the final dividend would be on Sept 10. (Star Biz)
Digistar Corp Bhd has proposed to undertake a private placement of up to 10% of its issued and paid-up share capital. As at July 18, the total issued share base for Digistar was 231.7m ordinary shares, with 90m outstanding warrants, it said in a filing to Bursa Malaysia yesterday. (BT)
Container handling and transshipment at Malaysian ports both saw a close to 5% rise for 1H12 with Port Klang and Tanjung Pelepas Port emerging as the busiest ports. Malaysian ports handled 10.34m teus containers for 1H12. Transshipment handling grew to 6.93m teus, from 6.61m teus. (Malaysian Reserve)
Faber Group is hoping that is hospital support services (HSS) contract with the Government will be resolved after Advance Pact Sdn Bhd had inked a 21.5 year HSS agreement for a new hospital in Kuantan last week. Based on sources, Health Ministry officials had paid a visit to Faber’s plant in Bukit Beruntung and had personally conveyed their assurance that the renewal of the HSS contract would be granted to Faber eventually. (Star Biz)
Tanjung Offshore Bhd has declared a tax-exempt special dividend, which will range from RM0.35-RM0.44. It said on Monday the final tax-exempt special dividend per share would be determined and announced on Aug 3 and the ex-date would be on Aug 9. Tanjung Offshore said based on the paid-up (excluding 2.47m treasury shares) as well as the outstanding 30.6m warrants 2006/2016; 408m warrants 2008/2013 and 4.0m options under the employees share option scheme as at June 29, the minimum and maximum amount of tax-exempt special dividend would be 35 sen and 44 sen per share. (Starbiz)
Inari Bhd plans to issue 84.2m new shares to raise RM30.3m to partly fund the acquisition of a Philippines company, Amertron Inc (Global) Ltd. Inari had on Monday signed a S&P agreement to acquire 100% of Amertron for US$32m (RM101.8m). Inari, an electronic manufacturing services (EMS) provider, will also issue 11.5m redeemable preference shares with 34.6m free five-year warrants, anticipated to raise about US$11.5m (RM36.6m). Shareholders will be entitled to two free warrants for every rights share subscribed and both these exercises would raise the 90% cash portion needed to acquire the company, said Inari Managing Director Dr Tan Seng Chuan. The remaining 10% will be also satisfied via issuance of new shares, he said, adding that the acquisition of Amertron, also an EMS company, is expected to be completed in six months. Amertron Global, which specialises in manufacturing of optoelectronic modules with final products including LED displays and fibre optic modules, owns three plants, two in the Philippines and one in China.Amertron Global President Richard Wang said the company produces 500m parts yearly and in 2011, its adjusted net tangible assets stood at US$32m, while turnover touched US$120.8m. (Bernama)
Fujitsu Malaysia is projecting a 26-30% revenue growth for the financial year ending March 31, 2013, with substantial contribution from the public sector and multinational business. Its President Charles Lew said the outlook for FY2012 is expected to be positive in Malaysia despite the softening global economy as the Japan-based technology company would focus on high-margin products and services and branding. Lew said there are new opportunities of growth, such as in the Small and Medium Enterprise (SME) business segment which Fujitsu hopes to tap into, with the adoption of cloud computing which provides more competitive costs for lower scale businesses. (Bernama)
Hyundai-Sime Darby Motors has received 5,000 bookings for its MD Elantra car since its launch on April 8. To date, 1,570 units of the car are already on Malaysian roads. The MD Elantra was also named the “Car of The Year” by Asian Auto in 2012. (Bernama)
MMC Corporation: PAAB snubs offer for JV
Pengurusan Aset Air Bhd (PAAB) confirmed that MMC Corporation has made an unsolicited offer for the two to establish a JV to own the country’s water assets. In a brief reply to questions from The Edge Financial Daily, PAAB confirmed that it attended a presentation on the possibility of co-owning the water assets by executives from MMC. However, PAAB said it is not seeking a partner to own the water assets. Nevertheless, PAAB added that there was no deadline given for it to revert to MMC on its offer. (Financial Daily)
Axiata: Likely to eye telecom license Myanmar
Market watchers said Axiata Group is likely to be eyeing a telecoms license that may be available soon in Myanmar. In a rare interview with the Financial Times a fortnight ago, Myanmar President Thein Sein named the telecoms, IT and technology sector as among areas the country would need knowledge from outside as well as foreign investment. (Financial Daily)
AirAsia: Source says low cost carrier to terminate collaboration agreement with MAS
A source says low-cost carrier AirAsia wants to opt out of all JV agreements with national carrier Malaysia Airlines (MAS). According to the source, AirAsia decided at a board meeting last week that it would seek to terminate its agreements with MAS soon. AirAsia group CEO Tan Sri Tony Fernandes said no comment when queried about the matter through text messages, while calls and text messages to AirAsia Malaysia CEO Aireen Omar went unanswered. MAS CEO Ahmad Jauhari Yahya did not respond to a text message to him. A termination of the memorandum of understandings (MOUs) between AirAsia and MAS would effectively wipe out the remnants of a deal between Khazanah Nasional Bhd and Tune Air Sdn Bhd that had gone awry. (Business Times)
Puncak Niaga: Cabinet panel rejects Selangor government bid for Syabas
The Special Cabinet Committee (SCC) on the Selangor Water Issue has rejected the proposed takeover of Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) by the Selangor government. Deputy Prime Minister Tan Sri Muhiyiddin Yasin said the takeover could not be done as the state government did not comply with the concession agreement, including allowing a water tariff hike. (Financial Daily)
Muhibbah Engineering: To diversify income streams
Muhibbah Engineering hopes to improve its recurring income base by intensifying its focus on build, operate and transfer projects in the oil and gas sector in the Asean region. The group is also looking at project management contracts (PMCs) in the oil and gas sector to reduce its reliance on contracting works, said its business development director Mac Chung Jin. He added that margins for contracting works are very cyclical these days. There is currency fluctuation when you go abroad and there is also price fluctuation. When oil price goes up, everything else does, too. Due to that, many have started to move away from being pure contractors. There are talks by Petronas to go into marginal fields, which is a good sign of positive things happening. (Business Times)
MTD ACPI Engineering: Lands contract worth RM303.2m
MTD ACPI Engineering has secured a contract worth RM303.2m to construct a fourth lane between the Sungai Buloh and Rawang interchange. In a filing Monday, the company said its unit MTD Construction Sdn Bhd had accepted the contract from UEMB-MRCB JV Sdn Bhd (formerly known as Intria Urus Sdn Bhd) on July 18. It said the contract would involve the building of a fourth lane between Sungai Buloh (km457.0) and the Rawang interchange (km443.9) package C. The company said package C comprised of all work from southbound and northbound inclusive of the drain and guardrails. MTD ACP said the contract was worth RM303.2m, including provisional sum of RM13.6m and prime cost sum of RM127m for duration of 30 months. (Financial Daily)
20120724 1026 Local & Global Economy Related News.
The country attracted RM3.4bn in investments in 1H12 from 14 companies under the Business Services national key economic areas (NKEA) Entry Point Projects (EPP2) with the potential of more than 4,600 job opportunities, said Human Resources Minister Datuk Seri Dr S. Subramaniam. In 1Q12, the EPP2 contributed to 2,210 new jobs and more than RM318m in services export value. This represented a 50.2% rise in new jobs and a 9% increase in the services export value. (The Star, Bernama)
Iskandar Malaysia has managed to secure RM10.7bn in new committed investments during the first six month of this year. Iskandar Regional Development Authority (Irda) CEO Datuk Ismail Ibrahim said since its inception in 2006 and until end-Jun this year, the total cumulative committed investments reached RM95.45bn in various sectors. 43% of the committed investments are already realised. Domestic investments constitute 62% (RM58.95bn) of the total investments of RM95.45bn, while the remaining 38% (RM36.50bn) is from overseas, he said. Key investments to date are represented by Asia (42%), Europe (40%) and the Middle East (14%), he said. Since 2006, the manufacturing sector in Iskandar Malaysia has recorded cumulative committed investments of RM32.71bn, while the property sector strongly recorded RM29.80bn. Investments in other sectors were utilities (RM9.52bn),government (RM7.31bn), petrochemicals (RM5.10bn), ports and logistics (RM3.74bn), tourism (RM2.03bn), education (RM1.55bn) and healthcare (RM1.60bn). (BT)
China's state-owned enterprises, posted a net profit drop of 16.4% yoy in the first half of 2012, 2.8% pts more than that of the first quarter. (Xinhua)
China’s non-financial direct outbound investment reached US$35.4bn during the first half, a 48.2% yoy growth, as Chinese companies took advantage of the global economic weakness to expand overseas. (Global Times)
Japan’s finance minister Jun Azumi asserted his stance on foreign exchange, saying he will “take decisive steps against speculative movement of excessive volatility” as the yen posted new highs against the euro and the dollar. (WSJ)
Japan’s Cabinet Office said that the expansion in China is “slowing a bit,” lowering its evaluation of Japan’s largest trading partner for a third month while leaving its assessment of its own economy unchanged, saying that the economy was “on the way to recovery at a moderate pace” in part because of rebuilding projects. (Bloomberg)
Japan’s supermarket sales in Jun fell 3.9% yoy (-1.7% in May), the fourth month in a row on account of poor weather conditions. (MNI News)
Germany, the Netherlands and Luxembourg’s Aaa credit rating outlooks were lowered to negative by Moody’s Investors Service, with risks that the Greece may leave the 17-nation euro currency and “increasing likelihood” of collective support for European countries such as Spain and Italy among reasons for the change. (Bloomberg)
The preliminary estimate of the eurozone’s consumer confidence fell to -21.6 in Jul (a revised -19.8 in Jun), an almost three-year low and worse than the -20.0 reading expected by economists in a Dow Jones poll. (WSJ)
The IMF stressed that is “is supporting Greece in overcoming its economic difficulties,” saying that "an IMF mission will start discussions with the country's authorities... on how to bring Greece's economic program, which is supported by IMF financial assistance, back on track." (AFP)
Spain's economy weakened further during the second quarter, with GDP contracting 0.4% qoq and 1% yoy, hit by a sharp drop in domestic demand and by intense volatility in financial markets, the Bank of Spain’s preliminary estimates show. The central bank expects 2012 growth to be at -1.5%. (WSJ)
Singapore's CPI rose 5.3% in Jun from 5.0% in May, primarily reflecting higher accommodation costs. Core inflation was stable at 2.7% for the third straight month as the lower contribution from prices of food, services and oil-related items was offset by stronger yoy increases in retail prices. (Bernama)
Thailand’s Department of International Trade Promotion Director Nantawan Sakultanak said exports from Thailand to the EU have declined by 11% or US$9bn during 5M12 compared to the same period in 2011. (Thai Financial Post)
Thailand and Myanmar yesterday agreed to set up a ministerial-level working group to implement comprehensive economic cooperation, particulary on achieving concrete progress in the Thai-invested Dawei seaport and economic zone. (The Nation)
Indonesia's central bank has begun buying yuan-denominated bonds issued in mainland China, joining a growing number of countries moving to add the Chinese currency to their foreign-exchange reserves. China has currency swap agreements with about 19 countries and any of them in theory can apply to use their yuan reserves to invest in Chinese bonds. (AWSJ)
Indonesia remains likely to import rice this year despite an expected 5.5m-ton surplus of the staple by the end of the year to maintain the rice buffer stocks of 10m tons at a minimum, approximately three-and-half months, or one harvest season. (Jakarta Post)
Vietnam is targeting to raise the number of skilled workers from 16m to more than 34m by 2020 by linking enterprises and training institutions in better equipped and more market-oriented courses. (Vietnam News)
Myanmar invited foreign firms to invest in its mining sector, with ministry of Mines top official Win Htein asking “investors who would like to do exploration, to confirm the reserve of a deposit or to start with the grassroots exploration operations in a virgin land” to “apply stating their intentions.” (AFP)
Iskandar Malaysia has managed to secure RM10.7bn in new committed investments during the first six month of this year. Iskandar Regional Development Authority (Irda) CEO Datuk Ismail Ibrahim said since its inception in 2006 and until end-Jun this year, the total cumulative committed investments reached RM95.45bn in various sectors. 43% of the committed investments are already realised. Domestic investments constitute 62% (RM58.95bn) of the total investments of RM95.45bn, while the remaining 38% (RM36.50bn) is from overseas, he said. Key investments to date are represented by Asia (42%), Europe (40%) and the Middle East (14%), he said. Since 2006, the manufacturing sector in Iskandar Malaysia has recorded cumulative committed investments of RM32.71bn, while the property sector strongly recorded RM29.80bn. Investments in other sectors were utilities (RM9.52bn),government (RM7.31bn), petrochemicals (RM5.10bn), ports and logistics (RM3.74bn), tourism (RM2.03bn), education (RM1.55bn) and healthcare (RM1.60bn). (BT)
China's state-owned enterprises, posted a net profit drop of 16.4% yoy in the first half of 2012, 2.8% pts more than that of the first quarter. (Xinhua)
China’s non-financial direct outbound investment reached US$35.4bn during the first half, a 48.2% yoy growth, as Chinese companies took advantage of the global economic weakness to expand overseas. (Global Times)
Japan’s finance minister Jun Azumi asserted his stance on foreign exchange, saying he will “take decisive steps against speculative movement of excessive volatility” as the yen posted new highs against the euro and the dollar. (WSJ)
Japan’s Cabinet Office said that the expansion in China is “slowing a bit,” lowering its evaluation of Japan’s largest trading partner for a third month while leaving its assessment of its own economy unchanged, saying that the economy was “on the way to recovery at a moderate pace” in part because of rebuilding projects. (Bloomberg)
Japan’s supermarket sales in Jun fell 3.9% yoy (-1.7% in May), the fourth month in a row on account of poor weather conditions. (MNI News)
Germany, the Netherlands and Luxembourg’s Aaa credit rating outlooks were lowered to negative by Moody’s Investors Service, with risks that the Greece may leave the 17-nation euro currency and “increasing likelihood” of collective support for European countries such as Spain and Italy among reasons for the change. (Bloomberg)
The preliminary estimate of the eurozone’s consumer confidence fell to -21.6 in Jul (a revised -19.8 in Jun), an almost three-year low and worse than the -20.0 reading expected by economists in a Dow Jones poll. (WSJ)
The IMF stressed that is “is supporting Greece in overcoming its economic difficulties,” saying that "an IMF mission will start discussions with the country's authorities... on how to bring Greece's economic program, which is supported by IMF financial assistance, back on track." (AFP)
Spain's economy weakened further during the second quarter, with GDP contracting 0.4% qoq and 1% yoy, hit by a sharp drop in domestic demand and by intense volatility in financial markets, the Bank of Spain’s preliminary estimates show. The central bank expects 2012 growth to be at -1.5%. (WSJ)
Singapore's CPI rose 5.3% in Jun from 5.0% in May, primarily reflecting higher accommodation costs. Core inflation was stable at 2.7% for the third straight month as the lower contribution from prices of food, services and oil-related items was offset by stronger yoy increases in retail prices. (Bernama)
Thailand’s Department of International Trade Promotion Director Nantawan Sakultanak said exports from Thailand to the EU have declined by 11% or US$9bn during 5M12 compared to the same period in 2011. (Thai Financial Post)
Thailand and Myanmar yesterday agreed to set up a ministerial-level working group to implement comprehensive economic cooperation, particulary on achieving concrete progress in the Thai-invested Dawei seaport and economic zone. (The Nation)
Indonesia's central bank has begun buying yuan-denominated bonds issued in mainland China, joining a growing number of countries moving to add the Chinese currency to their foreign-exchange reserves. China has currency swap agreements with about 19 countries and any of them in theory can apply to use their yuan reserves to invest in Chinese bonds. (AWSJ)
Indonesia remains likely to import rice this year despite an expected 5.5m-ton surplus of the staple by the end of the year to maintain the rice buffer stocks of 10m tons at a minimum, approximately three-and-half months, or one harvest season. (Jakarta Post)
Vietnam is targeting to raise the number of skilled workers from 16m to more than 34m by 2020 by linking enterprises and training institutions in better equipped and more market-oriented courses. (Vietnam News)
Myanmar invited foreign firms to invest in its mining sector, with ministry of Mines top official Win Htein asking “investors who would like to do exploration, to confirm the reserve of a deposit or to start with the grassroots exploration operations in a virgin land” to “apply stating their intentions.” (AFP)
20120724 1013 Global Market Related News.
Asia Stocks Little Changed Amid Renewed Europe Concern (Source: Bloomberg)
Asian stocks swung between gains and losses, halting the biggest two-day loss in eight weeks, after Moody’s Investors Service cut credit outlooks for Germany, the Netherlands and Luxembourg, renewing concern that Europe’s debt crisis is spreading. Nintendo Co., a maker of video-game players that depends on Europe for 34 percent of its sales, fell 1.2 percent in Osaka, Japan. Sharp Corp. (6753), Japan’s largest maker of liquid-crystal displays, dropped 4.8 percent on a report its quarterly loss will be around 100 billion yen ($1.3 billion). Aeon Credit Service Co. advanced 3.2 percent after Daiwa Securities Group Co. recommended investors buy the Japanese credit card company.
The MSCI Asia Pacific Index was little changed at 114.17 as of 9:25 a.m. in Tokyo before the open of markets in China. The index yesterday capped a two-day loss of 2.8 percent, the most since June 4. In Hong Kong, the markets may be closed today as the city sounded its highest storm signal for the first time since 1999 as Severe Typhoon Vicente intensified. “It’s going to take a lot longer to solve Europe,”said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Equity markets are in a hurry for a resolution, and I don’t think policy makers, politicians and central banks in Europe can meet that expectation in a realistic way.”
Japan Stocks Drop on Europe Debt-Crisis Concern (Source: Bloomberg)
Japanese stocks fell for a third day after Moody’s Investors Service cut the credit outlook for Germany, the Netherlands and Luxembourg, renewing concern about Europe’s debt crisis. Nintendo Co., a maker of video-game players that depends on Europe for 34 percent of its sales, fell 1.1 percent in Osaka, Japan. Sharp Corp., Japan’s largest maker of liquid-crystal displays, lost 3.7 percent after the Nikkei newspaper reported the company will likely report a wider full-year loss forecast. The Nikkei 225 Stock Average (NKY) lost 0.2 percent to 8,487.66 as of 9:41 a.m. in Tokyo. The broader Topix Index (TPX) slipped 0.3 percent to 718.83.
“It’s becoming increasingly obvious that the European situation will take a long time to solve,” said Diane Lin, a fund manager with Sydney-based fund Pengana Capital Ltd., which manages about $1.1 billion in global assets. “In the short-term there are still risks to the downside. Europe is a large economy in the world and it will have a serious impact on the export sector across the region.” She spoke in a Bloomberg TV interview.
Hong Kong Markets Delay Opening as Typhoon Vicente Passes (Source: Bloomberg)
Hong Kong hoisted its highest storm signal for the first time since 1999 as Severe Typhoon Vicente intensified while passing the city, injuring more than 100 people, grounding flights and delaying stock-market trading. The Hong Kong Observatory issued the number 10 hurricane signal at 12:45 a.m. local time today, as winds and rain caused five cases of flooding and toppled trees. At least 118 people were injured. It reduced the warning level to No. 8, the third- highest, at 3:35 a.m. “Present indications are that local winds have started to weaken,” and the signal will be reduced when wind drops below gale force, the observatory said in a statement posted on its website at about 7 a.m. local time. Maximum sustained wind speeds of as much as 93 kilometers (58 miles) an hour were recorded over parts of the city in the previous hour, it said.
The government closed all schools and public clinics yesterday as strong winds and heavy rain emptied streets. Cathay Pacific Airways Ltd. (293), the city’s biggest carrier, halted all local operations last night and will resume services at 8 a.m. today, with six flights delayed, according to an e-mailed statement. Ferry services have also been suspended.
U.S. Stocks Fall on Concern Europe’s Crisis Is Worsening (Source: Bloomberg)
U.S. stocks declined, sending the Standard & Poor’s 500 Index down for a second day, amid concern Europe’s debt crisis is deepening and after a Chinese central- bank adviser said the nation’s economic growth may slow further. All 10 S&P 500 groups fell as commodity shares had the biggest losses. The Bloomberg China-US Equity Index (CH55BN) of the most- traded Chinese shares in the U.S. sank 2.1 percent. McDonald’s (MCD) Corp. slid 2.9 percent as profit trailed estimates. S&P 500 (SPXL1) futures expiring in September lost 0.4 percent to 1,338.30 at 5:53 p.m. New York time as Moody’s Investors Service lowered the outlooks for Germany, the Netherlands and Luxembourg.
About five stocks fell for each rising on U.S. exchanges. The S&P 500 fell 0.9 percent to 1,350.52 at 4 p.m. in New York, paring a loss of 1.8 percent. The Dow Jones Industrial Average dropped 101.11 points, or 0.8 percent, to 12,721.46. The Chicago Board Options Exchange Volatility Index rose 14 percent to 18.62. Volume for exchange-listed stocks in the U.S. was 6.4 billion shares, or 3.9 percent below the three-month average. “Investors are on edge,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. His firm oversees $3.56 trillion. “Chinese growth has slowed. It’s not clear that the existing firewalls in Europe are large enough. We knew the Spanish regional governments had debt. The question is: how bad is it?”
Europe Stocks Sink Most in Three Months Amid Debt Crisis (Source: Bloomberg)
European stocks plunged the most in three months as concern grew that Greece will default and more Spanish regions will follow Valencia in seeking a bailout. BNP Paribas SA (BNP) and HSBC Holdings Plc contributed the most to a selloff by a gauge of bank shares. BHP Billiton Ltd. (BHP), the world’s largest mining company, retreated 2.8 percent as a policy maker in China warned of slowing growth. Groupe Eurotunnel SA slumped 5.8 percent after earnings missed analysts’ estimates. Royal Philips Electronics NV, the biggest lighting company, advanced 5 percent as profit increased. The Stoxx Europe 600 Index (SXXP) tumbled 2.5 percent to 251.75 the close of trading, the biggest retreat since April 10. The benchmark measure had climbed for the last seven weeks, its longest winning streak in more than six years, as central banks from Europe to China eased monetary policy to help support economic growth.
“The market has had a reality check, making it impossible to justify higher stock prices on so-so company reporting,” said Henrik Drusebjerg, who helps oversee $230 billion as senior strategist at Nordea Bank AB in Copenhagen. “Concern over Greece and the situation in Spain, with Valencia signing up for a bailout, are part of the reality check -- but investors are also catching up with a string of bad data from the U.S. last week and generally disappointing macro news from Europe.”
Emerging Stocks Drop Most in 8 Months on China Concerns (Source: Bloomberg)
Emerging-market stocks fell as the benchmark index posted the biggest drop in eight months amid renewed concern Europe’s debt crisis is worsening and as a Chinese central bank adviser warned of slowing growth. The MSCI Emerging Markets Index (MXEF) lost 2.6 percent to 912.47 by 5:30 p.m. in New York, the steepest decline since Nov. 23. Brazil’s Bovespa (IBOV) stock index dropped for a second day, pushed lower by beef producer JBS SA and Banco Bradesco SA (BBDC4), the country’s second-biggest bank by market value. China Pacific Insurance (Group) Co. (2601) tumbled by a record in Hong Kong as funds controlled by Carlyle Group LP sought to sell shares in the company.
Spanish borrowing costs surged to a record high on speculation more of the country’s regional governments will follow Valencia in seeking a bailout, increasing concern the debt crisis in Europe is deepening. The 21 countries in the MSCI emerging market index send about 30 percent of their exports to the European Union on average, data compiled by the World Trade Organization show. China’s expansion may cool to 7.4 percent this quarter, said Song Guoqing, an academic member of the People’s Bank of China monetary-policy committee. “People are moving again to risk-off mode due to the increasing Spain borrowing costs, which is a bad sign for everybody,” said Zoltan Koch at Hamburg-based Warburg Invest, which manages the equivalent of about $14.5 billion of assets. “People are just selling risky assets without thinking of direct effect of Spanish bond yields on emerging market fundamentals.”
Euro Near 11-Year Low Versus Yen on Spain, Italy Concern (Source: Bloomberg)
The euro was 0.7 percent from an 11- year low against the yen before Spain and Italy auction securities and ahead of data today that economists say will show the prolonged debt crisis is hurting the region’s economy. The 17-nation currency maintained a four-day decline versus the dollar after bond yields jumped in Spain and Italy. Moody’s Investors Service cut the rating outlook for Germany and the Netherlands to negative yesterday, citing a rising chance that they will have to shoulder the burden of indebted European nations. The yen strengthened against most of its major peers on increased demand for safer assets. “There are few reasons to buy the euro,” said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd. “Investors are worried that the debt crisis is spreading to Spain and Italy.”
The euro fell 0.1 percent to 94.91 yen as of 8:03 a.m. in Tokyo from the close in New York yesterday when it touched 94.24, the weakest since November 2000. The common currency was little changed at $1.2120 after sliding to $1.2067 yesterday, the least since June 2010. The yen gained 0.1 percent to 78.30 per dollar. Spain will auction bills today maturing in 84 days and 175 days, followed by Italy’s offerings of zero-coupon debt on July 26 and bills on July 27. Spain’s benchmark 10-year bond yield jumped to 7.565 percent yesterday, the highest since November 1996. The comparative rate in Italy climbed to 6.426 percent, a level unseen since Jan. 19.
FOREX-Euro falls 1 pct vs yen, hits lowest since Nov 2000
TOKYO, July 23 (Reuters) - The euro slid 1 percent against the yen, hitt ing its lowest level in more than 11-1/2 years, pressured by fears that Spain may eventually need a full sovereign bailout.
"With such strong risk aversion it is the yen and the dollar that will keep gaining against risk currencies," said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ in Tokyo. "The Spanish scenario has not been priced in yet."
Treasury Starts Auctions of Shares in 12 Bailed-Out Banks (Source: Bloomberg)
The U.S. Treasury Department said it started selling stakes today in 12 banks that received taxpayer funds after the financial crisis as the administration seeks to wind down its crisis-era bailout programs. The Treasury said it was beginning auctions of preferred stock and subordinated debt positions in the banks, which include Marquette National Corp. of Chicago, with about $1.7 billion in assets, and Exchange Bank of Santa Rosa, California, with about $1.6 billion. The auctions are part of the Obama administration’s efforts to get repaid for initiatives such as the Troubled Asset Relief Program, which Congress approved in 2008 to prevent further damage from the financial crisis. The administration has said the bailouts helped prevent a deeper recession, while Republican presidential candidate Mitt Romney has slammed President Barack Obama for expanding the budget deficit to fund stimulus programs and loans to General Motors Co. and Chrysler Group LLC.
The election in November “is a factor” motivating the Treasury to sell the bank shares quickly, said Kip Weissman, a partner representing banks for Luse Gorman Pomerenk & Schick P.C. in Washington. “The administration wants this stuff out, wants it resolved. There’s a lot of investor interest, but they’re going down the food chain in terms of quality, and that will be the issue.”
Bond Yields Fall to Records as Stocks, Euro Slide on Debt (Source: Bloomberg)
Government bond yields in the U.S., U.K. and Germany fell to records, while stocks dropped and the euro traded below its lifetime average against the dollar on concern the region’s debt crisis is deepening. Commodities slid as a Chinese central-bank adviser said growth may slow further. The yield on the 10-year U.S. Treasury note declined to 1.44 percent at 4 p.m. New York time after reaching an all-time low of 1.40 percent. Two-year German yields slumped to as low as minus 0.08 percent and Spanish and Italian yields jumped. The Standard & Poor’s 500 Index lost 0.9 percent, with almost eight shares declining for each one rising. The euro fell for a fourth day and oil dropped 3.5 percent. Credit-default swaps on Spain rose as much as 31 basis points to an all-time high of 636. S&P 500 futures expiring in September lost 0.4 percent to 1,338.30 at 5:30 p.m. in New York as Moody’s Investors Service cut the outlooks for Germany, the Netherlands and Luxembourg.
“Nothing is really fixed in Europe,” John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, said in a telephone interview. His firm oversees $201 billion. “The Spanish situation is chronic. And it’s not just Spain. This isn’t over.”
Investor Confidence Trails Consumers by Most Since 1995 (Source: Bloomberg)
U.S. consumer confidence and equity valuations are diverging the most in 17 years as the economy and profit growth leave stock prices behind. The Standard & Poor’s 500 Index has traded at an average price-earnings multiple of 13.9 this year, 0.18 times the mean level of the Thomson Reuters/University of Michigan final index of consumer sentiment, according to data compiled by Bloomberg. The gap is the widest since 1995, when the S&P 500 gained 34 percent for its biggest annual rally of the last five decades. Bears say the discounted valuations are still too high and anticipate the slowing U.S. recovery will lead to a repeat of last year, when equities lost 19 percent in five months. Bulls say price-earnings ratios as low as during the financial crisis make no sense with housing and industrial production expanding and the U.S. Federal Reserve standing ready to act should employment worsen.
“The world is profoundly underinvested in U.S. equities,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida. His firm oversees $350 billion. “We’re in a confidence crisis, so Mr. Market is unwilling to put a big, higher P/E ratio on it.”
Bernanke May Hit Limit From Buying Too Many Treasuries (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke may hit an obstacle as he considers whether more bond purchases are needed to spur growth: owning too much. Excessive Fed buying of Treasury securities may reduce liquidity by leaving less for private investors to buy, said Nathan Sheets, global head of international economics at Citigroup Inc. Bernanke instead may favor buying mortgage-backed securities or using new tools for easing, he said. Purchasing too many Treasuries may “have a serious long- term effect on the market,” Sheets, who until last August was the Fed’s top international economist, said in a phone interview. “The Fed implicitly has a mandate for financial stability, and as part of that they’re concerned about ensuring the functioning and integrity of financial markets.”
Bernanke testified to Congress last week that the Fed is evaluating additional steps to create jobs and reverse an economic slowdown, including buying mortgage bonds or changing language for its policy outlook. Unemployment hasn’t dropped below 8 percent even though the central bank has held its main interest rate near zero since December 2008 and purchased $2.3 trillion in bonds. Policy makers plan to meet July 31-Aug. 1. Some Fed officials believe continued purchases of longer- term Treasury securities may “lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy,” according to minutes of their June 19-20 meeting. Policy makers said it would be “helpful” to determine the magnitude of Fed holdings in Treasuries that would harm the market.
Goldman Sachs Sees ‘Strong’ Recovery Starting for Housing (Source: Bloomberg)
U.S. homebuilders are an attractive investment as the housing market starts a “strong” recovery that may drive a surge in new-home sales, Goldman Sachs Group Inc. (GS) said in a report today. Housing has a “long list of positives,” including rising prices, job growth, supportive government policies and a decline in the so-called shadow inventory of homes, Goldman Sachs analysts Joshua Pollard and Anto Savarirajan wrote in a note to clients. They raised their rating on the homebuilding industry to attractive from neutral. Public homebuilders, which have been taking market share from closely held companies, reported increasing orders this year as mortgage rates fell to record lows and the supply of existing homes for sale shrank. Construction of single-family houses rose 4.7 percent in June to a 539,000 annual rate, the fastest in two years, the Commerce Department said last week.
“The super cyclical housing market has turned and a strong recovery in new-home sales is ahead,” the Goldman Sachs analysts wrote. “Over the last year a number of risks to the housing market have abated, giving us confidence that rising home prices will drive a 3-7 year up-cycle in the U.S. market.” Pollard and Savarirajan added MDC Holdings Inc. (MDC) to its conviction buy list, raised KB Home (KBH) to buy from neutral, increased Ryland Group Inc. (RYL) to neutral from sell and lowered NVR Inc. (NVR) to sell from neutral. They maintained buy ratings on Toll Brothers Inc. (TOL) and PulteGroup Inc. (PHM)
Facebook Earnings Call Offers Shot at Rebuilding Image (Source: Bloomberg)
Facebook Inc. (FB) this week is getting its first crack as a public company to allay the growth concerns that have made it the second-worst performing U.S. technology initial public offering of 2012. The shares have tumbled 24 percent since Facebook, the largest social-networking service, held a May 17 IPO marred by technical glitches and signs that its price was set too high. Executives, probably including Chief Financial Officer David Ebersman and Chief Operating Officer Sheryl Sandberg, will hold a conference call July 26 to discuss second-quarter results. “This call is really critical for this company,” said Paul Argenti, a professor at Dartmouth College’s Tuck School of Business in Hanover, New Hampshire. “This is going to be an opportunity for them to really make a difference in terms of their investor relations strategy and set the record straight. They need to gain that momentum back and the exuberance that they lost as a result of the IPO.”
The call, at 5 p.m. New York time, gives management its first chance since May to make a case that Facebook deserves a higher price relative to earnings than 98 percent of the Standard & Poor’s 500. Shareholders will seek assurances that the company can keep users engaged amid rising competition from Twitter Inc. and Google (GOOG) Inc. and that it can overcome challenges making money from advertising on mobile devices.
Canada Shifts Toward China With $15 Billion Nexen Bid (Source: Bloomberg)
Cnooc Ltd. (883)’s $15.1 billion cash takeover bid for Nexen Inc. (NXY) signals a Canadian shift toward China and away from the U.S. as the nation’s traditional oil and natural-gas partner and main export market. Canada’s oil sands reserves, the third-largest recoverable crude deposits in the world, were developed in part by U.S. money as companies such as California’s Richfield Oil Corp. brought technology to extract bitumen from boreal peat bogs half a century ago. Now, for the first time, a Chinese company will own and operate oil-sands crude production as well as Nexen’s shale-gas assets in British Columbia, along with leases in other parts of the world.
“This is really a decoupling of the north-south axis with the U.S.,” Michael Black, a partner with Fasken Martineau DuMoulin LLP who has advised on C$8.5 billion ($8.4 billion) worth of Canadian deals by Abu Dhabi Nation Energy Co. (TAQA), said in an interview. “The U.S. guys just aren’t coming up here the way they used to. It further illustrates Chinese interest in big assets, big reserves and Canadian expertise.” Chinese oil producers have turned more frequently to Canada after political opposition in the U.S. derailed Cnooc’s $18.5 billion bid for Unocal Corp. in 2005, and after TransCanada Corp. (TRP)’s Keystone XL pipeline route south to Texas was blocked by President Barack Obama’s administration last year.
China Shadow Bankers Go Online as Peer-to-Peer Sites Boom (Source: Bloomberg)
Jack Qiu, spending evenings in front of his laptop in the southern Chinese city of Guangzhou, is earning the best returns of his life: 14.2 percent on an annualized basis in just two months. He’s doing it by lending money to strangers online. An accountant by day, Qiu has turned out to be a better loan manager by night than most banks. Only two investments out of his 80,000 yuan ($12,525) total, each worth 100 yuan, have gone unpaid. Nonperforming loans at a Chinese lender, on average, would be almost four times as much. “I don’t care what the money is used for because that’s beyond my control,” said the 30-year-old certified financial planner who jumped into online lending in May by registering at Ppdai.com, one of China’s largest such sites. “For me, the key is to identify those who have at least a willingness to honor their debt, so I need to keep my eyes wide open.”
Peer-to-peer lending is taking off in China as traditional methods of private lending among family and acquaintances, part of the country’s unregulated $2.4 trillion shadow-banking system, move online. More than 2,000 websites have been set up nationwide since 2007, China National Radio reported in May. Loans brokered online increased 300-fold to 6 billion yuan in the first half of 2011, the latest figures available, from the full year total in 2007, the report said.
Floods Ease in Beijing After Rainstorms Leave 37 People Dead (Source: Bloomberg)
A weekend storm that dumped as much as 16 inches of rain in Beijing, the most since records were first kept 60 years ago, left 37 people dead, including a man who drowned in his car after it was submerged under a bridge. The July 21 rainstorm caused 10 billion yuan ($1.6 billion) in flood damage and stranded about 80,000 travelers after their flights were delayed, China Daily newspaper said. Authorities evacuated 56,933 people from the hardest-hit areas, the official Xinhua News Agency reported. The storm spurred criticism on China’s microblog services that city drainage systems were ill-equipped to handle the deluge even after infrastructure upgrades and a 4 trillion yuan stimulus package during the 2008 global financial crisis. “The sewer system belongs to infrastructure, right?” Wang Mudi, a television host in Guangdong, wrote on his microblog with Sina Corp.’s Weibo service. “Then how much money of the 4 trillion yuan flowed to the sewer system?”
The flooding had eased in Beijing by the afternoon today. The downpour in the capital was part of a broader storm across the country that displaced at least 567,000 people and killed 95 since July 20, Xinhua reported.
Japan Opposition Chief Warns Noda Against Altering Tax Increase (Source: Bloomberg)
Japanese opposition leader Sadakazu Tanigaki said he may submit a no-confidence motion aimed at removing the ruling Democratic Party from government if it backpedals on a plan to double the sales tax. Prime Minister Yoshihiko Noda pushed the measure through the Diet’s lower house last month in a bid to tackle Japan’s record debt and ballooning welfare outlays, at the cost of splitting his Democratic Party as dozens of its lawmakers left. Noda needs support from Tanigaki’s Liberal Democratic Party to pass the plan in the upper house, where he lacks a majority. “If they modify it to please members of the ruling party, we are more likely to tell them to forget the whole thing than to say OK,” Tanigaki said in an interview yesterday with Bloomberg News in his Tokyo office. At that point a no- confidence motion would be “possible,” he said.
Tanigaki’s warning raises the political stakes for Noda as he seeks to secure both the enactment of the tax legislation and the survival of his administration. Noda faces re-election as leader of his party in September, and is the third DPJ prime minister since it took power in September 2009.
Japan Sees Wider Global Slowdown as China Growth Cools: Economy (Source: Bloomberg)
China’s economic outlook was cut by Japan, its biggest Asian trading partner, as the Shanghai Composite Index fell to its lowest level in three years on concern about faltering domestic demand and export growth. “The slowdown in the global economy is becoming more widespread,” the Cabinet Office said in a monthly report released in Tokyo today. Song Guoqing, an academic member of a monetary policy committee, said July 21 that China’s expansion may be 7.4 percent, the least since the first quarter 2009. Japan’s increased pessimism echoes that of the International Monetary Fund, which lowered 2013 global growth forecasts this month on Europe’s debt crisis and slower expansions in emerging markets from China to India. Chinese stocks fell today to the lowest since March 2009 as weakness in corporate profits threatens to add to the drags on growth from property-market curbs and limited export demand.
“The consensus is that China’s economic growth rate will be close to 8 percent in coming months, but I personally am more pessimistic because there are problems on the export side,” Song said at a forum in Beijing.
Brazil Inflation Surprise Won’t Threaten Goal, Tombini Says (Source: Bloomberg)
The jump in Brazilian consumer prices this month was a temporary reversal and won’t jeopardize the government’s 4.5 percent inflation target this year, central bank President Alexandre Tombini said. Prices as measured by the mid-month IPCA-15 index rose 0.33 in July, exceeding all 42 estimates in a Bloomberg survey of analysts whose median forecast was for a 0.18 percent rise. Consumer prices rose 5.24 percent from a year earlier, the national statistics agency reported July 20. Brazil’s economy will accelerate in the second half without stoking inflation, Tombini said today. The mid-July consumer price reading was affected by bad weather that pushed up food prices, he said. “Convergence will take place, this process is not a linear one, it is not a homogeneous one,” Tombini said in a conference call with international reporters. “Between August and December there is a lot of room for the process of convergence to continue and for us to get to our target for 2012.”
The central bank has cut the benchmark Selic rate by 450 basis points since August to a record low 8 percent, as the world’s largest emerging market after China struggles to spur growth and offset the effects of Europe’s debt crisis.
Thailand, Philippines May Resist Rate Cut as Growth Holds Up (Source: Bloomberg)
Thailand and the Philippines will probably refrain from cutting interest rates this week as the Southeast Asian economies withstand a global growth slowdown that spurred policy easing from Brazil to China. The Bank of Thailand will keep its benchmark unchanged at 3 percent for a fourth straight meeting tomorrow, according to all 13 economists in a Bloomberg News survey. Eleven of the 14 analysts in a separate survey forecast the Philippines will hold rates at 4 percent the next day, even as more predicted a reduction this month than for the June meeting. Both countries forecast growth as fast as 6 percent in 2012, aided by government spending in the Philippines and post- flood reconstruction in Thailand, which this month marks 15 years since its baht devaluation sparked the Asian financial crisis. Inflation risks may also re-emerge and crimp scope for easing as a U.S. drought pushes corn and soybean to records and India’s monsoon shortfall threatens rice output in the No. 2 producer.
“Monetary policies in Southeast Asia are fairly accommodative and that’s enough to support growth for now,” said Aninda Mitra, Singapore-based head of Southeast Asian economics at Australia & New Zealand Banking Group Ltd. (ANZ) “The scope to cut rates is tempting but it will be too premature at this point, as inflation risks could be exacerbated.”
Hollande Transaction Tax Drives Investors’ Quest for Loopholes (Source: Bloomberg)
French President Francois Hollande’s transaction tax is set to take effect Aug. 1. Not all investors will be paying it. To escape the tax, many institutional investors will turn to so-called contracts for difference, or CFDs, offered by prime brokers that let them bet on a stock’s gain or loss without owning the shares. Traders have used it successfully to skirt the U.K.’s stamp duty. “We’ve never purchased U.K. stocks without using a CFD,” said Fabrice Seiman, co-chief executive officer of Lutetia Capital, a merger-arbitrage fund in Paris that oversees $100 million. “Now we’ll do the same for French stocks. It is individual investors who are going to pay.”
France will become the first European country to impose a transaction tax on share purchases, including high-frequency trading and credit default swaps. The levy, aimed at curbing market speculation, will be paid on transactions involving 109 French stocks with market values of more than 1 billion euros ($1.2 billion), including Pernod Ricard SA and Vivendi SA. (VIV) The U.K., home to Europe’s biggest financial center, has a stamp duty while opposing a transaction tax. German Chancellor Angela Merkel said on June 22 that she and the leaders of France, Italy and Spain agree on the need for such a levy. The other countries have yet to put one in place. Investors buying U.K. shares pay a stamp duty of 0.5 percent on their purchase.
Germany, Netherlands Rating Outlooks Cut to Negative by Moody’s (Source: Bloomberg)
Germany, the Netherlands and Luxembourg’s Aaa credit rating outlooks were lowered to negative by Moody’s Investors Service, which cited “rising uncertainty” about Europe’s debt crisis. Risks that Greece may leave the 17-nation euro currency and “increasing likelihood” of collective support for European countries such as Spain and Italy were among reasons for the change, Moody’s said yesterday in a statement. “Given the greater ability to absorb the costs associated with this support, this burden will likely fall most heavily on more highly rated member states if the euro area is to be preserved in its current form,” Moody’s said. Europe was plunged into fresh market turmoil yesterday as the first call for bailout aid by a Spanish region sent borrowing costs surging, while Spain and Italy reinstated a ban on betting on stock declines. Government bond yields in the U.S., U.K. and Germany fell to records, while stocks dropped and the euro traded below its lifetime average against the dollar.
With “Germany’s central position in the euro zone, the idea that it could be somehow isolated from the general deterioration of the euro area is not realistic,” said Nicolas Veron, senior fellow at Bruegel, a Brussels-based research organization. “From this standpoint, the downgrade sounds logical.”
Euro Crisis Deepens With New Spain Woes, Short Sale Ban (Source: Bloomberg)
Europe was plunged into fresh market turmoil as the first call for bailout aid by a Spanish region sent borrowing costs surging, while Spain and Italy reinstated a ban on betting on stock declines. Stocks and the euro fell as Catalonia joined a list of Spanish regions that may tap aid from the central government, spurring 10-year yields to rise to a euro-era record. Meantime, Greece’s so-called troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- arrives tomorrow in Athens, rekindling concern the currency union will splinter. “The problem in the region is profound, but the pace that it has been dealt with was slow,” said John Stopford, head of fixed income at Investec Asset Management, which oversees $98 billion. “The bank bailout for Spain is far from sufficient to deal with the country’s problems.”
After euro finance ministers failed to stanch a decline in the single currency with the approval of a 100 billion-euro ($122 billion) aid package for Spanish banks last week, the ban by the governments in Rome and Madrid reflected renewed concern that the currency union was far from resolving its crisis. The euro slipped below its lifetime average against the U.S. dollar and to the lowest level in more than 11 years against the yen today, dropping to $1.2080 at 2:41 p.m. in Frankfurt. Spain’s 10-year bond yields rose as high as to 7.57 percent. The Stoxx Europe 600 Index dropped 2.4 percent at 3:45 p.m. in London.
Spanish Recession Probably Deepened in Second Quarter: Economy (Source: Bloomberg)
Spain’s recession deepened in the three months through June as the toughest budget cuts in the country’s democratic history pushed the economy into a third consecutive quarter of contraction, the Bank of Spain said. The euro area’s fourth-largest economy shrank 0.4 percent from the first quarter, when gross domestic product fell 0.3 percent, the central bank said in an estimate in its monthly bulletin released in Madrid today. Domestic demand “fell more sharply than in the prior quarter,” while exports showed a “moderate recovery,” it said. Prime Minister Mariano Rajoy last week announced his fourth round of tax increases and spending cuts since Dec. 30 as he struggles to convince investors that the nation won’t need a second bailout. The planned budget cuts through 2014 now amount to more than 10 percent of annual GDP. Spain’s 10-year note yields surged above 7.5 percent today, breaching a level that forced Ireland, Portugal and Greece to seek external aid.
“Confidence suffered further following the latest Spanish news over the past couple of days,” said Christian Melzer, an economist at Dekabank in Frankfurt. “We don’t see the breakup of the euro, but whether the euro region will still be the same in terms of members over the next two years is unclear. We don’t expect Spain to leave; the latest austerity measures are definitely a positive step for the nation.”
Spain, Italy Ban Short Selling to Slow Market Turmoil (Source: Bloomberg)
Spain and Italy reinstated a short- sale ban on stocks as bank shares plunged to record lows, bond yields rose and the euro traded below its lifetime average against the dollar on concern the debt crisis is growing. Spain’s CNMV market regulator banned the creation of negative bets on equities through shares, derivatives and over- the-counter instruments for three months. Italy’s Consob prohibited the practice on 29 banking and insurance stocks for one week, citing “grave tensions” in financial markets. Today’s move echoes decisions in August last year by the two nations plus France and Belgium after European banks hit their lowest levels since the credit crisis of 2008 and 2009. Most bank stocks extended their decline once the bans were lifted.
“I don’t think it is particularly smart but it is to be expected,” said Owen Callan, senior dealer at Danske Bank A/S (DANSKE) in Dublin, in a phone interview. “Last time around it didn’t really have any lasting impact. This is trying to avert hedge- fund speculation, but the selloff is not about speculation. This is not hedge funds trying to bring down the market.” Short-sellers sell borrowed shares with plans to buy them back later at a lower price, a practice some politicians and investors blame for roiling markets.
Asian stocks swung between gains and losses, halting the biggest two-day loss in eight weeks, after Moody’s Investors Service cut credit outlooks for Germany, the Netherlands and Luxembourg, renewing concern that Europe’s debt crisis is spreading. Nintendo Co., a maker of video-game players that depends on Europe for 34 percent of its sales, fell 1.2 percent in Osaka, Japan. Sharp Corp. (6753), Japan’s largest maker of liquid-crystal displays, dropped 4.8 percent on a report its quarterly loss will be around 100 billion yen ($1.3 billion). Aeon Credit Service Co. advanced 3.2 percent after Daiwa Securities Group Co. recommended investors buy the Japanese credit card company.
The MSCI Asia Pacific Index was little changed at 114.17 as of 9:25 a.m. in Tokyo before the open of markets in China. The index yesterday capped a two-day loss of 2.8 percent, the most since June 4. In Hong Kong, the markets may be closed today as the city sounded its highest storm signal for the first time since 1999 as Severe Typhoon Vicente intensified. “It’s going to take a lot longer to solve Europe,”said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Equity markets are in a hurry for a resolution, and I don’t think policy makers, politicians and central banks in Europe can meet that expectation in a realistic way.”
Japan Stocks Drop on Europe Debt-Crisis Concern (Source: Bloomberg)
Japanese stocks fell for a third day after Moody’s Investors Service cut the credit outlook for Germany, the Netherlands and Luxembourg, renewing concern about Europe’s debt crisis. Nintendo Co., a maker of video-game players that depends on Europe for 34 percent of its sales, fell 1.1 percent in Osaka, Japan. Sharp Corp., Japan’s largest maker of liquid-crystal displays, lost 3.7 percent after the Nikkei newspaper reported the company will likely report a wider full-year loss forecast. The Nikkei 225 Stock Average (NKY) lost 0.2 percent to 8,487.66 as of 9:41 a.m. in Tokyo. The broader Topix Index (TPX) slipped 0.3 percent to 718.83.
“It’s becoming increasingly obvious that the European situation will take a long time to solve,” said Diane Lin, a fund manager with Sydney-based fund Pengana Capital Ltd., which manages about $1.1 billion in global assets. “In the short-term there are still risks to the downside. Europe is a large economy in the world and it will have a serious impact on the export sector across the region.” She spoke in a Bloomberg TV interview.
Hong Kong Markets Delay Opening as Typhoon Vicente Passes (Source: Bloomberg)
Hong Kong hoisted its highest storm signal for the first time since 1999 as Severe Typhoon Vicente intensified while passing the city, injuring more than 100 people, grounding flights and delaying stock-market trading. The Hong Kong Observatory issued the number 10 hurricane signal at 12:45 a.m. local time today, as winds and rain caused five cases of flooding and toppled trees. At least 118 people were injured. It reduced the warning level to No. 8, the third- highest, at 3:35 a.m. “Present indications are that local winds have started to weaken,” and the signal will be reduced when wind drops below gale force, the observatory said in a statement posted on its website at about 7 a.m. local time. Maximum sustained wind speeds of as much as 93 kilometers (58 miles) an hour were recorded over parts of the city in the previous hour, it said.
The government closed all schools and public clinics yesterday as strong winds and heavy rain emptied streets. Cathay Pacific Airways Ltd. (293), the city’s biggest carrier, halted all local operations last night and will resume services at 8 a.m. today, with six flights delayed, according to an e-mailed statement. Ferry services have also been suspended.
U.S. Stocks Fall on Concern Europe’s Crisis Is Worsening (Source: Bloomberg)
U.S. stocks declined, sending the Standard & Poor’s 500 Index down for a second day, amid concern Europe’s debt crisis is deepening and after a Chinese central- bank adviser said the nation’s economic growth may slow further. All 10 S&P 500 groups fell as commodity shares had the biggest losses. The Bloomberg China-US Equity Index (CH55BN) of the most- traded Chinese shares in the U.S. sank 2.1 percent. McDonald’s (MCD) Corp. slid 2.9 percent as profit trailed estimates. S&P 500 (SPXL1) futures expiring in September lost 0.4 percent to 1,338.30 at 5:53 p.m. New York time as Moody’s Investors Service lowered the outlooks for Germany, the Netherlands and Luxembourg.
About five stocks fell for each rising on U.S. exchanges. The S&P 500 fell 0.9 percent to 1,350.52 at 4 p.m. in New York, paring a loss of 1.8 percent. The Dow Jones Industrial Average dropped 101.11 points, or 0.8 percent, to 12,721.46. The Chicago Board Options Exchange Volatility Index rose 14 percent to 18.62. Volume for exchange-listed stocks in the U.S. was 6.4 billion shares, or 3.9 percent below the three-month average. “Investors are on edge,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. His firm oversees $3.56 trillion. “Chinese growth has slowed. It’s not clear that the existing firewalls in Europe are large enough. We knew the Spanish regional governments had debt. The question is: how bad is it?”
Europe Stocks Sink Most in Three Months Amid Debt Crisis (Source: Bloomberg)
European stocks plunged the most in three months as concern grew that Greece will default and more Spanish regions will follow Valencia in seeking a bailout. BNP Paribas SA (BNP) and HSBC Holdings Plc contributed the most to a selloff by a gauge of bank shares. BHP Billiton Ltd. (BHP), the world’s largest mining company, retreated 2.8 percent as a policy maker in China warned of slowing growth. Groupe Eurotunnel SA slumped 5.8 percent after earnings missed analysts’ estimates. Royal Philips Electronics NV, the biggest lighting company, advanced 5 percent as profit increased. The Stoxx Europe 600 Index (SXXP) tumbled 2.5 percent to 251.75 the close of trading, the biggest retreat since April 10. The benchmark measure had climbed for the last seven weeks, its longest winning streak in more than six years, as central banks from Europe to China eased monetary policy to help support economic growth.
“The market has had a reality check, making it impossible to justify higher stock prices on so-so company reporting,” said Henrik Drusebjerg, who helps oversee $230 billion as senior strategist at Nordea Bank AB in Copenhagen. “Concern over Greece and the situation in Spain, with Valencia signing up for a bailout, are part of the reality check -- but investors are also catching up with a string of bad data from the U.S. last week and generally disappointing macro news from Europe.”
Emerging Stocks Drop Most in 8 Months on China Concerns (Source: Bloomberg)
Emerging-market stocks fell as the benchmark index posted the biggest drop in eight months amid renewed concern Europe’s debt crisis is worsening and as a Chinese central bank adviser warned of slowing growth. The MSCI Emerging Markets Index (MXEF) lost 2.6 percent to 912.47 by 5:30 p.m. in New York, the steepest decline since Nov. 23. Brazil’s Bovespa (IBOV) stock index dropped for a second day, pushed lower by beef producer JBS SA and Banco Bradesco SA (BBDC4), the country’s second-biggest bank by market value. China Pacific Insurance (Group) Co. (2601) tumbled by a record in Hong Kong as funds controlled by Carlyle Group LP sought to sell shares in the company.
Spanish borrowing costs surged to a record high on speculation more of the country’s regional governments will follow Valencia in seeking a bailout, increasing concern the debt crisis in Europe is deepening. The 21 countries in the MSCI emerging market index send about 30 percent of their exports to the European Union on average, data compiled by the World Trade Organization show. China’s expansion may cool to 7.4 percent this quarter, said Song Guoqing, an academic member of the People’s Bank of China monetary-policy committee. “People are moving again to risk-off mode due to the increasing Spain borrowing costs, which is a bad sign for everybody,” said Zoltan Koch at Hamburg-based Warburg Invest, which manages the equivalent of about $14.5 billion of assets. “People are just selling risky assets without thinking of direct effect of Spanish bond yields on emerging market fundamentals.”
Euro Near 11-Year Low Versus Yen on Spain, Italy Concern (Source: Bloomberg)
The euro was 0.7 percent from an 11- year low against the yen before Spain and Italy auction securities and ahead of data today that economists say will show the prolonged debt crisis is hurting the region’s economy. The 17-nation currency maintained a four-day decline versus the dollar after bond yields jumped in Spain and Italy. Moody’s Investors Service cut the rating outlook for Germany and the Netherlands to negative yesterday, citing a rising chance that they will have to shoulder the burden of indebted European nations. The yen strengthened against most of its major peers on increased demand for safer assets. “There are few reasons to buy the euro,” said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd. “Investors are worried that the debt crisis is spreading to Spain and Italy.”
The euro fell 0.1 percent to 94.91 yen as of 8:03 a.m. in Tokyo from the close in New York yesterday when it touched 94.24, the weakest since November 2000. The common currency was little changed at $1.2120 after sliding to $1.2067 yesterday, the least since June 2010. The yen gained 0.1 percent to 78.30 per dollar. Spain will auction bills today maturing in 84 days and 175 days, followed by Italy’s offerings of zero-coupon debt on July 26 and bills on July 27. Spain’s benchmark 10-year bond yield jumped to 7.565 percent yesterday, the highest since November 1996. The comparative rate in Italy climbed to 6.426 percent, a level unseen since Jan. 19.
FOREX-Euro falls 1 pct vs yen, hits lowest since Nov 2000
TOKYO, July 23 (Reuters) - The euro slid 1 percent against the yen, hitt ing its lowest level in more than 11-1/2 years, pressured by fears that Spain may eventually need a full sovereign bailout.
"With such strong risk aversion it is the yen and the dollar that will keep gaining against risk currencies," said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ in Tokyo. "The Spanish scenario has not been priced in yet."
Treasury Starts Auctions of Shares in 12 Bailed-Out Banks (Source: Bloomberg)
The U.S. Treasury Department said it started selling stakes today in 12 banks that received taxpayer funds after the financial crisis as the administration seeks to wind down its crisis-era bailout programs. The Treasury said it was beginning auctions of preferred stock and subordinated debt positions in the banks, which include Marquette National Corp. of Chicago, with about $1.7 billion in assets, and Exchange Bank of Santa Rosa, California, with about $1.6 billion. The auctions are part of the Obama administration’s efforts to get repaid for initiatives such as the Troubled Asset Relief Program, which Congress approved in 2008 to prevent further damage from the financial crisis. The administration has said the bailouts helped prevent a deeper recession, while Republican presidential candidate Mitt Romney has slammed President Barack Obama for expanding the budget deficit to fund stimulus programs and loans to General Motors Co. and Chrysler Group LLC.
The election in November “is a factor” motivating the Treasury to sell the bank shares quickly, said Kip Weissman, a partner representing banks for Luse Gorman Pomerenk & Schick P.C. in Washington. “The administration wants this stuff out, wants it resolved. There’s a lot of investor interest, but they’re going down the food chain in terms of quality, and that will be the issue.”
Bond Yields Fall to Records as Stocks, Euro Slide on Debt (Source: Bloomberg)
Government bond yields in the U.S., U.K. and Germany fell to records, while stocks dropped and the euro traded below its lifetime average against the dollar on concern the region’s debt crisis is deepening. Commodities slid as a Chinese central-bank adviser said growth may slow further. The yield on the 10-year U.S. Treasury note declined to 1.44 percent at 4 p.m. New York time after reaching an all-time low of 1.40 percent. Two-year German yields slumped to as low as minus 0.08 percent and Spanish and Italian yields jumped. The Standard & Poor’s 500 Index lost 0.9 percent, with almost eight shares declining for each one rising. The euro fell for a fourth day and oil dropped 3.5 percent. Credit-default swaps on Spain rose as much as 31 basis points to an all-time high of 636. S&P 500 futures expiring in September lost 0.4 percent to 1,338.30 at 5:30 p.m. in New York as Moody’s Investors Service cut the outlooks for Germany, the Netherlands and Luxembourg.
“Nothing is really fixed in Europe,” John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, said in a telephone interview. His firm oversees $201 billion. “The Spanish situation is chronic. And it’s not just Spain. This isn’t over.”
Investor Confidence Trails Consumers by Most Since 1995 (Source: Bloomberg)
U.S. consumer confidence and equity valuations are diverging the most in 17 years as the economy and profit growth leave stock prices behind. The Standard & Poor’s 500 Index has traded at an average price-earnings multiple of 13.9 this year, 0.18 times the mean level of the Thomson Reuters/University of Michigan final index of consumer sentiment, according to data compiled by Bloomberg. The gap is the widest since 1995, when the S&P 500 gained 34 percent for its biggest annual rally of the last five decades. Bears say the discounted valuations are still too high and anticipate the slowing U.S. recovery will lead to a repeat of last year, when equities lost 19 percent in five months. Bulls say price-earnings ratios as low as during the financial crisis make no sense with housing and industrial production expanding and the U.S. Federal Reserve standing ready to act should employment worsen.
“The world is profoundly underinvested in U.S. equities,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida. His firm oversees $350 billion. “We’re in a confidence crisis, so Mr. Market is unwilling to put a big, higher P/E ratio on it.”
Bernanke May Hit Limit From Buying Too Many Treasuries (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke may hit an obstacle as he considers whether more bond purchases are needed to spur growth: owning too much. Excessive Fed buying of Treasury securities may reduce liquidity by leaving less for private investors to buy, said Nathan Sheets, global head of international economics at Citigroup Inc. Bernanke instead may favor buying mortgage-backed securities or using new tools for easing, he said. Purchasing too many Treasuries may “have a serious long- term effect on the market,” Sheets, who until last August was the Fed’s top international economist, said in a phone interview. “The Fed implicitly has a mandate for financial stability, and as part of that they’re concerned about ensuring the functioning and integrity of financial markets.”
Bernanke testified to Congress last week that the Fed is evaluating additional steps to create jobs and reverse an economic slowdown, including buying mortgage bonds or changing language for its policy outlook. Unemployment hasn’t dropped below 8 percent even though the central bank has held its main interest rate near zero since December 2008 and purchased $2.3 trillion in bonds. Policy makers plan to meet July 31-Aug. 1. Some Fed officials believe continued purchases of longer- term Treasury securities may “lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy,” according to minutes of their June 19-20 meeting. Policy makers said it would be “helpful” to determine the magnitude of Fed holdings in Treasuries that would harm the market.
Goldman Sachs Sees ‘Strong’ Recovery Starting for Housing (Source: Bloomberg)
U.S. homebuilders are an attractive investment as the housing market starts a “strong” recovery that may drive a surge in new-home sales, Goldman Sachs Group Inc. (GS) said in a report today. Housing has a “long list of positives,” including rising prices, job growth, supportive government policies and a decline in the so-called shadow inventory of homes, Goldman Sachs analysts Joshua Pollard and Anto Savarirajan wrote in a note to clients. They raised their rating on the homebuilding industry to attractive from neutral. Public homebuilders, which have been taking market share from closely held companies, reported increasing orders this year as mortgage rates fell to record lows and the supply of existing homes for sale shrank. Construction of single-family houses rose 4.7 percent in June to a 539,000 annual rate, the fastest in two years, the Commerce Department said last week.
“The super cyclical housing market has turned and a strong recovery in new-home sales is ahead,” the Goldman Sachs analysts wrote. “Over the last year a number of risks to the housing market have abated, giving us confidence that rising home prices will drive a 3-7 year up-cycle in the U.S. market.” Pollard and Savarirajan added MDC Holdings Inc. (MDC) to its conviction buy list, raised KB Home (KBH) to buy from neutral, increased Ryland Group Inc. (RYL) to neutral from sell and lowered NVR Inc. (NVR) to sell from neutral. They maintained buy ratings on Toll Brothers Inc. (TOL) and PulteGroup Inc. (PHM)
Facebook Earnings Call Offers Shot at Rebuilding Image (Source: Bloomberg)
Facebook Inc. (FB) this week is getting its first crack as a public company to allay the growth concerns that have made it the second-worst performing U.S. technology initial public offering of 2012. The shares have tumbled 24 percent since Facebook, the largest social-networking service, held a May 17 IPO marred by technical glitches and signs that its price was set too high. Executives, probably including Chief Financial Officer David Ebersman and Chief Operating Officer Sheryl Sandberg, will hold a conference call July 26 to discuss second-quarter results. “This call is really critical for this company,” said Paul Argenti, a professor at Dartmouth College’s Tuck School of Business in Hanover, New Hampshire. “This is going to be an opportunity for them to really make a difference in terms of their investor relations strategy and set the record straight. They need to gain that momentum back and the exuberance that they lost as a result of the IPO.”
The call, at 5 p.m. New York time, gives management its first chance since May to make a case that Facebook deserves a higher price relative to earnings than 98 percent of the Standard & Poor’s 500. Shareholders will seek assurances that the company can keep users engaged amid rising competition from Twitter Inc. and Google (GOOG) Inc. and that it can overcome challenges making money from advertising on mobile devices.
Canada Shifts Toward China With $15 Billion Nexen Bid (Source: Bloomberg)
Cnooc Ltd. (883)’s $15.1 billion cash takeover bid for Nexen Inc. (NXY) signals a Canadian shift toward China and away from the U.S. as the nation’s traditional oil and natural-gas partner and main export market. Canada’s oil sands reserves, the third-largest recoverable crude deposits in the world, were developed in part by U.S. money as companies such as California’s Richfield Oil Corp. brought technology to extract bitumen from boreal peat bogs half a century ago. Now, for the first time, a Chinese company will own and operate oil-sands crude production as well as Nexen’s shale-gas assets in British Columbia, along with leases in other parts of the world.
“This is really a decoupling of the north-south axis with the U.S.,” Michael Black, a partner with Fasken Martineau DuMoulin LLP who has advised on C$8.5 billion ($8.4 billion) worth of Canadian deals by Abu Dhabi Nation Energy Co. (TAQA), said in an interview. “The U.S. guys just aren’t coming up here the way they used to. It further illustrates Chinese interest in big assets, big reserves and Canadian expertise.” Chinese oil producers have turned more frequently to Canada after political opposition in the U.S. derailed Cnooc’s $18.5 billion bid for Unocal Corp. in 2005, and after TransCanada Corp. (TRP)’s Keystone XL pipeline route south to Texas was blocked by President Barack Obama’s administration last year.
China Shadow Bankers Go Online as Peer-to-Peer Sites Boom (Source: Bloomberg)
Jack Qiu, spending evenings in front of his laptop in the southern Chinese city of Guangzhou, is earning the best returns of his life: 14.2 percent on an annualized basis in just two months. He’s doing it by lending money to strangers online. An accountant by day, Qiu has turned out to be a better loan manager by night than most banks. Only two investments out of his 80,000 yuan ($12,525) total, each worth 100 yuan, have gone unpaid. Nonperforming loans at a Chinese lender, on average, would be almost four times as much. “I don’t care what the money is used for because that’s beyond my control,” said the 30-year-old certified financial planner who jumped into online lending in May by registering at Ppdai.com, one of China’s largest such sites. “For me, the key is to identify those who have at least a willingness to honor their debt, so I need to keep my eyes wide open.”
Peer-to-peer lending is taking off in China as traditional methods of private lending among family and acquaintances, part of the country’s unregulated $2.4 trillion shadow-banking system, move online. More than 2,000 websites have been set up nationwide since 2007, China National Radio reported in May. Loans brokered online increased 300-fold to 6 billion yuan in the first half of 2011, the latest figures available, from the full year total in 2007, the report said.
Floods Ease in Beijing After Rainstorms Leave 37 People Dead (Source: Bloomberg)
A weekend storm that dumped as much as 16 inches of rain in Beijing, the most since records were first kept 60 years ago, left 37 people dead, including a man who drowned in his car after it was submerged under a bridge. The July 21 rainstorm caused 10 billion yuan ($1.6 billion) in flood damage and stranded about 80,000 travelers after their flights were delayed, China Daily newspaper said. Authorities evacuated 56,933 people from the hardest-hit areas, the official Xinhua News Agency reported. The storm spurred criticism on China’s microblog services that city drainage systems were ill-equipped to handle the deluge even after infrastructure upgrades and a 4 trillion yuan stimulus package during the 2008 global financial crisis. “The sewer system belongs to infrastructure, right?” Wang Mudi, a television host in Guangdong, wrote on his microblog with Sina Corp.’s Weibo service. “Then how much money of the 4 trillion yuan flowed to the sewer system?”
The flooding had eased in Beijing by the afternoon today. The downpour in the capital was part of a broader storm across the country that displaced at least 567,000 people and killed 95 since July 20, Xinhua reported.
Japan Opposition Chief Warns Noda Against Altering Tax Increase (Source: Bloomberg)
Japanese opposition leader Sadakazu Tanigaki said he may submit a no-confidence motion aimed at removing the ruling Democratic Party from government if it backpedals on a plan to double the sales tax. Prime Minister Yoshihiko Noda pushed the measure through the Diet’s lower house last month in a bid to tackle Japan’s record debt and ballooning welfare outlays, at the cost of splitting his Democratic Party as dozens of its lawmakers left. Noda needs support from Tanigaki’s Liberal Democratic Party to pass the plan in the upper house, where he lacks a majority. “If they modify it to please members of the ruling party, we are more likely to tell them to forget the whole thing than to say OK,” Tanigaki said in an interview yesterday with Bloomberg News in his Tokyo office. At that point a no- confidence motion would be “possible,” he said.
Tanigaki’s warning raises the political stakes for Noda as he seeks to secure both the enactment of the tax legislation and the survival of his administration. Noda faces re-election as leader of his party in September, and is the third DPJ prime minister since it took power in September 2009.
Japan Sees Wider Global Slowdown as China Growth Cools: Economy (Source: Bloomberg)
China’s economic outlook was cut by Japan, its biggest Asian trading partner, as the Shanghai Composite Index fell to its lowest level in three years on concern about faltering domestic demand and export growth. “The slowdown in the global economy is becoming more widespread,” the Cabinet Office said in a monthly report released in Tokyo today. Song Guoqing, an academic member of a monetary policy committee, said July 21 that China’s expansion may be 7.4 percent, the least since the first quarter 2009. Japan’s increased pessimism echoes that of the International Monetary Fund, which lowered 2013 global growth forecasts this month on Europe’s debt crisis and slower expansions in emerging markets from China to India. Chinese stocks fell today to the lowest since March 2009 as weakness in corporate profits threatens to add to the drags on growth from property-market curbs and limited export demand.
“The consensus is that China’s economic growth rate will be close to 8 percent in coming months, but I personally am more pessimistic because there are problems on the export side,” Song said at a forum in Beijing.
Brazil Inflation Surprise Won’t Threaten Goal, Tombini Says (Source: Bloomberg)
The jump in Brazilian consumer prices this month was a temporary reversal and won’t jeopardize the government’s 4.5 percent inflation target this year, central bank President Alexandre Tombini said. Prices as measured by the mid-month IPCA-15 index rose 0.33 in July, exceeding all 42 estimates in a Bloomberg survey of analysts whose median forecast was for a 0.18 percent rise. Consumer prices rose 5.24 percent from a year earlier, the national statistics agency reported July 20. Brazil’s economy will accelerate in the second half without stoking inflation, Tombini said today. The mid-July consumer price reading was affected by bad weather that pushed up food prices, he said. “Convergence will take place, this process is not a linear one, it is not a homogeneous one,” Tombini said in a conference call with international reporters. “Between August and December there is a lot of room for the process of convergence to continue and for us to get to our target for 2012.”
The central bank has cut the benchmark Selic rate by 450 basis points since August to a record low 8 percent, as the world’s largest emerging market after China struggles to spur growth and offset the effects of Europe’s debt crisis.
Thailand, Philippines May Resist Rate Cut as Growth Holds Up (Source: Bloomberg)
Thailand and the Philippines will probably refrain from cutting interest rates this week as the Southeast Asian economies withstand a global growth slowdown that spurred policy easing from Brazil to China. The Bank of Thailand will keep its benchmark unchanged at 3 percent for a fourth straight meeting tomorrow, according to all 13 economists in a Bloomberg News survey. Eleven of the 14 analysts in a separate survey forecast the Philippines will hold rates at 4 percent the next day, even as more predicted a reduction this month than for the June meeting. Both countries forecast growth as fast as 6 percent in 2012, aided by government spending in the Philippines and post- flood reconstruction in Thailand, which this month marks 15 years since its baht devaluation sparked the Asian financial crisis. Inflation risks may also re-emerge and crimp scope for easing as a U.S. drought pushes corn and soybean to records and India’s monsoon shortfall threatens rice output in the No. 2 producer.
“Monetary policies in Southeast Asia are fairly accommodative and that’s enough to support growth for now,” said Aninda Mitra, Singapore-based head of Southeast Asian economics at Australia & New Zealand Banking Group Ltd. (ANZ) “The scope to cut rates is tempting but it will be too premature at this point, as inflation risks could be exacerbated.”
Hollande Transaction Tax Drives Investors’ Quest for Loopholes (Source: Bloomberg)
French President Francois Hollande’s transaction tax is set to take effect Aug. 1. Not all investors will be paying it. To escape the tax, many institutional investors will turn to so-called contracts for difference, or CFDs, offered by prime brokers that let them bet on a stock’s gain or loss without owning the shares. Traders have used it successfully to skirt the U.K.’s stamp duty. “We’ve never purchased U.K. stocks without using a CFD,” said Fabrice Seiman, co-chief executive officer of Lutetia Capital, a merger-arbitrage fund in Paris that oversees $100 million. “Now we’ll do the same for French stocks. It is individual investors who are going to pay.”
France will become the first European country to impose a transaction tax on share purchases, including high-frequency trading and credit default swaps. The levy, aimed at curbing market speculation, will be paid on transactions involving 109 French stocks with market values of more than 1 billion euros ($1.2 billion), including Pernod Ricard SA and Vivendi SA. (VIV) The U.K., home to Europe’s biggest financial center, has a stamp duty while opposing a transaction tax. German Chancellor Angela Merkel said on June 22 that she and the leaders of France, Italy and Spain agree on the need for such a levy. The other countries have yet to put one in place. Investors buying U.K. shares pay a stamp duty of 0.5 percent on their purchase.
Germany, Netherlands Rating Outlooks Cut to Negative by Moody’s (Source: Bloomberg)
Germany, the Netherlands and Luxembourg’s Aaa credit rating outlooks were lowered to negative by Moody’s Investors Service, which cited “rising uncertainty” about Europe’s debt crisis. Risks that Greece may leave the 17-nation euro currency and “increasing likelihood” of collective support for European countries such as Spain and Italy were among reasons for the change, Moody’s said yesterday in a statement. “Given the greater ability to absorb the costs associated with this support, this burden will likely fall most heavily on more highly rated member states if the euro area is to be preserved in its current form,” Moody’s said. Europe was plunged into fresh market turmoil yesterday as the first call for bailout aid by a Spanish region sent borrowing costs surging, while Spain and Italy reinstated a ban on betting on stock declines. Government bond yields in the U.S., U.K. and Germany fell to records, while stocks dropped and the euro traded below its lifetime average against the dollar.
With “Germany’s central position in the euro zone, the idea that it could be somehow isolated from the general deterioration of the euro area is not realistic,” said Nicolas Veron, senior fellow at Bruegel, a Brussels-based research organization. “From this standpoint, the downgrade sounds logical.”
Euro Crisis Deepens With New Spain Woes, Short Sale Ban (Source: Bloomberg)
Europe was plunged into fresh market turmoil as the first call for bailout aid by a Spanish region sent borrowing costs surging, while Spain and Italy reinstated a ban on betting on stock declines. Stocks and the euro fell as Catalonia joined a list of Spanish regions that may tap aid from the central government, spurring 10-year yields to rise to a euro-era record. Meantime, Greece’s so-called troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- arrives tomorrow in Athens, rekindling concern the currency union will splinter. “The problem in the region is profound, but the pace that it has been dealt with was slow,” said John Stopford, head of fixed income at Investec Asset Management, which oversees $98 billion. “The bank bailout for Spain is far from sufficient to deal with the country’s problems.”
After euro finance ministers failed to stanch a decline in the single currency with the approval of a 100 billion-euro ($122 billion) aid package for Spanish banks last week, the ban by the governments in Rome and Madrid reflected renewed concern that the currency union was far from resolving its crisis. The euro slipped below its lifetime average against the U.S. dollar and to the lowest level in more than 11 years against the yen today, dropping to $1.2080 at 2:41 p.m. in Frankfurt. Spain’s 10-year bond yields rose as high as to 7.57 percent. The Stoxx Europe 600 Index dropped 2.4 percent at 3:45 p.m. in London.
Spanish Recession Probably Deepened in Second Quarter: Economy (Source: Bloomberg)
Spain’s recession deepened in the three months through June as the toughest budget cuts in the country’s democratic history pushed the economy into a third consecutive quarter of contraction, the Bank of Spain said. The euro area’s fourth-largest economy shrank 0.4 percent from the first quarter, when gross domestic product fell 0.3 percent, the central bank said in an estimate in its monthly bulletin released in Madrid today. Domestic demand “fell more sharply than in the prior quarter,” while exports showed a “moderate recovery,” it said. Prime Minister Mariano Rajoy last week announced his fourth round of tax increases and spending cuts since Dec. 30 as he struggles to convince investors that the nation won’t need a second bailout. The planned budget cuts through 2014 now amount to more than 10 percent of annual GDP. Spain’s 10-year note yields surged above 7.5 percent today, breaching a level that forced Ireland, Portugal and Greece to seek external aid.
“Confidence suffered further following the latest Spanish news over the past couple of days,” said Christian Melzer, an economist at Dekabank in Frankfurt. “We don’t see the breakup of the euro, but whether the euro region will still be the same in terms of members over the next two years is unclear. We don’t expect Spain to leave; the latest austerity measures are definitely a positive step for the nation.”
Spain, Italy Ban Short Selling to Slow Market Turmoil (Source: Bloomberg)
Spain and Italy reinstated a short- sale ban on stocks as bank shares plunged to record lows, bond yields rose and the euro traded below its lifetime average against the dollar on concern the debt crisis is growing. Spain’s CNMV market regulator banned the creation of negative bets on equities through shares, derivatives and over- the-counter instruments for three months. Italy’s Consob prohibited the practice on 29 banking and insurance stocks for one week, citing “grave tensions” in financial markets. Today’s move echoes decisions in August last year by the two nations plus France and Belgium after European banks hit their lowest levels since the credit crisis of 2008 and 2009. Most bank stocks extended their decline once the bans were lifted.
“I don’t think it is particularly smart but it is to be expected,” said Owen Callan, senior dealer at Danske Bank A/S (DANSKE) in Dublin, in a phone interview. “Last time around it didn’t really have any lasting impact. This is trying to avert hedge- fund speculation, but the selloff is not about speculation. This is not hedge funds trying to bring down the market.” Short-sellers sell borrowed shares with plans to buy them back later at a lower price, a practice some politicians and investors blame for roiling markets.
20120724 1012 Global Commodities Related News.
Bull Rush as Commodity Wagers Rise to Three-Month High (Source: Bloomberg)
Speculators raised bullish wagers on commodities to a three-month high on mounting speculation that more economic stimulus will boost demand for everything from oil to metals and crop prices will keep rising as drought spreads. Money managers raised their net-long positions across 18 U.S. futures and options by 7.5 percent to 1.13 million contracts in the week ended July 17, U.S. Commodity Futures Trading Commission data show. Wheat holdings reached a record, and corn bets climbed to the highest since March. Almost $2.5 trillion was added to the value of global equities since June 4 as investors anticipated policy makers would step in to bolster growth. Federal Reserve Chairman Ben S. Bernanke told Congress during testimony on July 18 that he is prepared to act to boost the recovery and central banks from Europe to China cut interest rates in the past several weeks. The worst U.S. drought in 56 years is parching crops, and a lack of rain is also wilting fields from Australia to Russia.
“You could probably call it a miniature stampede back into commodities,” said Jeffrey Sica, the Morristown, New Jersey- based president of SICA Wealth Management who helps oversee more than $1 billion of assets. “A lot of investors at this point see that increased liquidity in the market will mean more appreciation in raw-materials prices.”
McDonald’s Bought Commodities Before Rally, Cuts Cost Forecast (Source: Bloomberg)
McDonald’s Corp. (MCD), the world’s largest restaurant chain, said it bought grain and other commodities before a rally in prices, allowing the company to cut a forecast for some costs. A U.S. “grocery basket” will be 3.5 percent to 4.5 percent higher this year, Peter J. Bensen, the chief financial officer of Oak Brook, Illinois-based McDonald’s, said today on a conference call with analysts. That compared with the company’s projection on April 20 for an increase of 4.5 percent to 5.5 percent. The worst drought in 56 years has eroded prospects for crops in the Midwest. Corn and soybean futures rose to all-time highs today, increasing feed costs for livestock producers. The U.S. is the top producer of both commodities. In March, the retail price of ground beef rose to the highest since at least 1984, and grocers in April sold whole chickens at record highs on average.
“Our supply-chain folks, our suppliers, our treasury folks really spent a lot of time earlier this year looking at the markets and did a great job in securing a lot of our grains and other commodities at cost before they ran up related to the recent drought,” Bensen said. “And so that’s why we are able to lower our outlook for this year.” About 55 percent of the contiguous U.S. was in moderate to extreme drought at the end of June, the highest percentage since 1956, National Climatic Data Center figures show. From June 15 to July 20, corn futures surged 57 percent. McDonald’s bought 727 million pounds of chicken and 800 million pounds of beef in the U.S. in 2010.
Pro Farmer: After the Bell Wheat Recap (Source: CME)
The September and December wheat contracts at all locations posted losses in the 20- to 30-cent range. Deferred contracts saw losses ranging from around a nickel to the mid-teens, depending on location. Heavy losses in the soybean market and the corn market at times today, along with strength in the U.S. dollar index kept pressure on wheat for most of today's session.
Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures ended lower in the September through July 2013 contracts, while far-deferred months posted slight gains. Futures ended well off today's lows. Despite forecasts calling for better rain chances the next several days and midday weather models suggesting cooler, wetter conditions are likely during the second half of the 15-day window, futures closed well off session lows and avoided chart damage. Traders realize that rains now would be too late for much of the corn crop as irreversible damage has been done. Still, it's hard for futures to continue to charge higher if rains are in the outlook.
GRAINS-Corn, soy ease from record highs; U.S. crops face more heat
SINGAPORE, July 23 (Reuters) - Chicago corn and soy slid after marking record highs last week, tracking declines in broader markets as worries on Europe's debt woes festered, though relentless heat in the U.S. grain belt continued to destroy crops.
"We don't think the rally is over year yet, especially for corn as demand rationing, which the market has to do, is something it has never done before in terms of the scale," said Victor Thianpiriya, an agricultural commodity strategist at ANZ.
Thailand raises main rice crop forecast to 25.9 mln tonnes
BANGKOK, July 23 (Reuters) - Thailand, the world's biggest rice exporter, is expected to produce 25.9 million tonnes of paddy in its main 2012/13 crop, more than an earlier forecast of 24 million tonnes, the Agriculture Ministry said on Monday.
"We expect to see higher-than-forecast output this year as the government intervention price has encouraged farmers to grow more rice," Apichart Jongsakul, head of the ministry's Office of the Agriculture Economy, told Reuters.
Poor rains, prices boost India's basmati sowing
CHANDIGARH, July 23 (Reuters) - Scanty monsoon rains and expectations of better returns have boosted the cultivation of premium basmati rice in India, the world's second biggest rice producer and top basmati seller, improving the prospects of more exports, government officials said.
Basmati rice brings higher returns, requires less water and can be sown late, factors that attract farmers in the northern Indian states of Punjab and Haryana. These states account for over 70 percent of India's output of the aromatic, long-grain staple, which has been exempted from a rice export ban.
Grain prices set records, more searing heat in forecast
CHICAGO/NEW YORK, July 20 (Reuters) - Grain prices set record highs on Friday and weather forecasts showed little to no relief in sight from the worst U.S. drought in more than half a century, feeding worries about food inflation at home and abroad as supplies dwindle in the world's largest grain exporter.
The United Nations' Food and Agriculture Organization (FAO) said it was concerned about the spike in grain prices, but it did not yet see the current situation as a repeat of the 2007-2008 food crisis when high prices sparked riots in many poor countries.
Speculators boost net long corn stake for 5th straight week
CHICAGO, July 20 (Reuters) - Large speculators raised their net long stake in corn to the biggest in more than three months as the most extensive drought in the United States in 56 years triggered a sharp rise in corn prices, regulatory data released on F rid ay showed.
The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, boosted their net long stake in soybeans to the most since early May in the five trading days ended July 17.
SOFTS-Sugar, coffee slip, worries on Europe debt fester
LONDON, July 23 (Reuters) - Sugar and coffee futures on ICE eased in early trade tracking declines in broader markets as worries on Europe's debt festered.
Cocoa futures dipped following mixed global grindings results this month, clouding the outlook for demand. Sugar markets dipped on light investor dealings, pressured by a stronger dollar.
Ivorian cocoa arrivals seen at 1,285,000 T by July 22
ABIDJAN, July 23 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 1,285,000 tonnes by July 22, exporters estimated on Monday, compared with 1,350,226 tonnes in the same period of the previous season.
Exporters estimated around 12,000 tonnes of beans were delivered to the West African state's two ports between July 16 to July 22, down from 19,687 tonnes in the same week a year ago.
Centam, Mexico, Colombia coffee exports up 22.5 pct in June
GUATEMALA CITY, July 20 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic rose 22.5 percent in June compared to the same month last year, reaching 2.94 million 60-kg bags in the month.
Guatemala's coffee association ANACAFE, which collates figures from the mostly arabica growing region, said Friday exports through the first nine months of the 2011/2012 harvesting season were 20.71 million bags, down 2.3 percent from the same nine-month period in the 2010/2011 season.
Europe Heat Wave Wilting Corn Adds to U.S. Drought: Commodities (Source: Bloomberg)
Heat waves in southern Europe are withering the corn crop and reducing yields in a region that accounts for 16 percent of global exports at a time when U.S. drought already drove prices to a record. Temperatures in a band running from eastern Italy across the Black Sea region into Ukraine reached 35 degrees Celsius (95 degrees Fahrenheit) or more this month, about 5 degrees above normal, U.S. government data show. Corn, now in the pollination phase that creates kernels, risks damage above 32 degrees, said Cedric Weber, the head of market analysis at Bourges, France- based Offre et Demande Agricole, which advises farmers on sales. The heat wave in Europe is adding to concern about global food supplies as U.S. farmers face the worst drought since 1956, India delays sowing because of a late monsoon and Australian crops endure below-average rainfall. Soybeans and corn rose to all-time highs yesterday and wheat surged 51 percent since June 1.
The United Nations says food prices will probably rebound after falling the most in three years in the second quarter. “Everyone is looking to the U.S., but clearly in Europe we’ll need to import a lot of wheat and corn,” said Weber, whose company advises about 5,000 farmers. “That’s just adding to the problems we’ve got everywhere.”
Oil Trades Near One-Week Low After Biggest Drop This Year (Source: Bloomberg)
Oil traded near the lowest level in a week in New York after the biggest drop this year on concern fuel demand is weakening as Europe’s debt crisis threatens to derail the global economy. Futures were little changed after declining 4 percent yesterday, the most since December. The U.S. refinery utilization rate slipped for a second week, according to a Bloomberg survey before a government report tomorrow. Moody’s Investors Service cited “rising uncertainty” about Europe’s debt crisis as it cut the Aaa credit-rating outlook for Germany, the Netherlands and Luxembourg to “negative.” “These are macro factors driving the market,” Michael McCarthy, a chief market strategist at CMC Markets in Sydney, said in a telephone interview today. “In the very short-term we’re looking for further falls.”
Oil for September delivery was at $88.06 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 10:35 a.m. Sydney time. The contract yesterday decreased $3.69 to $88.14, the lowest since July 13. Prices are down 11 percent this year. Brent crude for September settlement was at $103.40 a barrel, up 14 cents, on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $15.34, from $15.12 yesterday.
Iran has small win with China, still losing battle
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, July 23 (Reuters) - Iran appears to have won a small victory with Chinese imports of its crude set to reach a monthly record in July, but any relief in Tehran may be short-lived.
China may buy 590,000 barrels a day from Iran this month, up from 430,000 in June and the 480,000 average for last year, according to Petrologistics, a Geneva-based consultancy.
OIL-Oil slides towards $103 on eurozone fears
LONDON, July 23 (Reuters) - Oil prices slipped towards $103 a barrel as investors sold off riskier assets and fled for the perceived safety of the dollar on fears that Spain will not be able to avoid a costly sovereign bailout.
"There are fears this could be the beginning of a domino effect which ultimately leads to Spain having to join Greece, Portugal and Ireland in asking for an official rescue," said Carsten Fritsch, energy analyst at Commerzbank in Frankfurt.
Italy's Monti in Russia to boost energy cooperation
MOSCOW, July 23 (Reuters) - Russia and Italy ramped up their strategic cooperation on energy as Prime Minister Mario Monti made his first visit to the world's largest oil-producing nation on Monday to refresh ties that were typically warm under his predecessor Silvio Berlusconi.
Technocrat premier Monti met Russian Prime Minister Dmitry Medvedev in Moscow and was due to discuss plans for a major Russian gas export pipeline project to serve southern Europe at talks with President Vladimir Putin in Sochi later.
China's June Iran oil imports at 11-mth high - customs
BEIJING, July 23 (Reuters) - China's crude oil imports from Iran rose to their highest in nearly a year in June despite tough Western sanctions targetting Iran's oil shipments.
State-run Chinese oil firms resumed imports from Iran in April after resolving a dispute over 2012 annual supplies that had led to sharp cuts in oil purchases in the first quarter.
S.Korea's June crude imports from Iran down a quarter
SEOUL, July 23 (Reuters) - South Korea imported just over 176,000 barrels per day of Iranian crude oil in June, down about a quarter from a year ago, as shipments wound down ahead of a complete halt in July due to an EU ban on insuring tankers carrying Iranian oil.
The world's No.4 buyer of Iranian crude imported 34.51 million barrels from Iran during the first six months of this year, down 17.1 percent from the same period a year ago, data from state-run Korea National Oil Corp showed on Monday.
LNG Goes Extra 9,800 Miles as Europe Spurs Record Rates: Freight (Source: Bloomberg)
The biggest collapse in European demand for liquefied natural gas in at least 12 years and record Asian imports are sending fuel cargoes an extra 9,800 miles around the globe and boosting tanker rates to the highest ever. European consumption will drop 20 percent in 2012 as Asian usage jumps 11 percent, according to Sanford C. Bernstein & Co. That’s spurring traders to ship LNG imported into Europe from as far away as Qatar back on the same route and then on to Japan. Vessel rates will rise 54 percent this year, the median of six analyst forecasts compiled by Bloomberg shows. Shares of Golar LNG Ltd. (GOL), which operates nine of them, will gain 26 percent in the next 12 months, according to the average of 12 estimates.
As European economies stagnate, Japan is importing more fuel than ever as it replaces nuclear power shut off after the earthquake and tsunami in March 2011. Two of 50 nuclear plants are operational and LNG prices in the nation, the biggest importer of the fuel, are about 44 percent higher than in Europe. The biggest shortages in the LNG industry are in shipping as the cargo surge overwhelms the fleet’s capacity, according to the Paris-based International Energy Agency. “The shipping market will remain as tight as it is for the next two years,” said Fotis Giannakoulis, an analyst at Morgan Stanley in New York. “The weak European economy is not helping demand and they have excess capacity, so these imported volumes are available to be sent to Asia.”
Brazil’s Vale Seen Posting Best Mining Profit Surprise (Source: Bloomberg)
Vale SA (VALE3) is poised to deliver the biggest earnings surprise this year among the world’s top three mining companies as analysts raise profit projections, while lowering forecasts for BHP Billiton Ltd. (BHP) and Rio Tinto Group. Analysts increased estimates for Vale’s adjusted net income for this year by 7.7 percent in the past four weeks to $16.7 billion, according to data compiled by Bloomberg. Forecasts for BHP, the world’s largest mining company, and Rio Tinto fell 1.3 percent and 6.6 percent, respectively, the data show. The Brazilian real’s 23 percent decline against the U.S. dollar in the past year means cheaper labor and operational costs for Rio de Janeiro-based Vale, which gets about half its sales from exports to Asia. The bulk of BHP and Rio’s operations are in Australia, whose dollar fell 3.5 percent. Vale will benefit from China’s steps to stimulate its economy, said Jonathan Brandt, an analyst at HSBC Holdings Plc.
“Given stimulus measures that we have seen in China, there is a greater risk for a positive surprise than a negative surprise,” Brandt said in a July 20 telephone interview from New York. “The weaker real will help Vale with their cost pressure.”
Speculators raised bullish wagers on commodities to a three-month high on mounting speculation that more economic stimulus will boost demand for everything from oil to metals and crop prices will keep rising as drought spreads. Money managers raised their net-long positions across 18 U.S. futures and options by 7.5 percent to 1.13 million contracts in the week ended July 17, U.S. Commodity Futures Trading Commission data show. Wheat holdings reached a record, and corn bets climbed to the highest since March. Almost $2.5 trillion was added to the value of global equities since June 4 as investors anticipated policy makers would step in to bolster growth. Federal Reserve Chairman Ben S. Bernanke told Congress during testimony on July 18 that he is prepared to act to boost the recovery and central banks from Europe to China cut interest rates in the past several weeks. The worst U.S. drought in 56 years is parching crops, and a lack of rain is also wilting fields from Australia to Russia.
“You could probably call it a miniature stampede back into commodities,” said Jeffrey Sica, the Morristown, New Jersey- based president of SICA Wealth Management who helps oversee more than $1 billion of assets. “A lot of investors at this point see that increased liquidity in the market will mean more appreciation in raw-materials prices.”
McDonald’s Bought Commodities Before Rally, Cuts Cost Forecast (Source: Bloomberg)
McDonald’s Corp. (MCD), the world’s largest restaurant chain, said it bought grain and other commodities before a rally in prices, allowing the company to cut a forecast for some costs. A U.S. “grocery basket” will be 3.5 percent to 4.5 percent higher this year, Peter J. Bensen, the chief financial officer of Oak Brook, Illinois-based McDonald’s, said today on a conference call with analysts. That compared with the company’s projection on April 20 for an increase of 4.5 percent to 5.5 percent. The worst drought in 56 years has eroded prospects for crops in the Midwest. Corn and soybean futures rose to all-time highs today, increasing feed costs for livestock producers. The U.S. is the top producer of both commodities. In March, the retail price of ground beef rose to the highest since at least 1984, and grocers in April sold whole chickens at record highs on average.
“Our supply-chain folks, our suppliers, our treasury folks really spent a lot of time earlier this year looking at the markets and did a great job in securing a lot of our grains and other commodities at cost before they ran up related to the recent drought,” Bensen said. “And so that’s why we are able to lower our outlook for this year.” About 55 percent of the contiguous U.S. was in moderate to extreme drought at the end of June, the highest percentage since 1956, National Climatic Data Center figures show. From June 15 to July 20, corn futures surged 57 percent. McDonald’s bought 727 million pounds of chicken and 800 million pounds of beef in the U.S. in 2010.
Pro Farmer: After the Bell Wheat Recap (Source: CME)
The September and December wheat contracts at all locations posted losses in the 20- to 30-cent range. Deferred contracts saw losses ranging from around a nickel to the mid-teens, depending on location. Heavy losses in the soybean market and the corn market at times today, along with strength in the U.S. dollar index kept pressure on wheat for most of today's session.
Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures ended lower in the September through July 2013 contracts, while far-deferred months posted slight gains. Futures ended well off today's lows. Despite forecasts calling for better rain chances the next several days and midday weather models suggesting cooler, wetter conditions are likely during the second half of the 15-day window, futures closed well off session lows and avoided chart damage. Traders realize that rains now would be too late for much of the corn crop as irreversible damage has been done. Still, it's hard for futures to continue to charge higher if rains are in the outlook.
GRAINS-Corn, soy ease from record highs; U.S. crops face more heat
SINGAPORE, July 23 (Reuters) - Chicago corn and soy slid after marking record highs last week, tracking declines in broader markets as worries on Europe's debt woes festered, though relentless heat in the U.S. grain belt continued to destroy crops.
"We don't think the rally is over year yet, especially for corn as demand rationing, which the market has to do, is something it has never done before in terms of the scale," said Victor Thianpiriya, an agricultural commodity strategist at ANZ.
Thailand raises main rice crop forecast to 25.9 mln tonnes
BANGKOK, July 23 (Reuters) - Thailand, the world's biggest rice exporter, is expected to produce 25.9 million tonnes of paddy in its main 2012/13 crop, more than an earlier forecast of 24 million tonnes, the Agriculture Ministry said on Monday.
"We expect to see higher-than-forecast output this year as the government intervention price has encouraged farmers to grow more rice," Apichart Jongsakul, head of the ministry's Office of the Agriculture Economy, told Reuters.
Poor rains, prices boost India's basmati sowing
CHANDIGARH, July 23 (Reuters) - Scanty monsoon rains and expectations of better returns have boosted the cultivation of premium basmati rice in India, the world's second biggest rice producer and top basmati seller, improving the prospects of more exports, government officials said.
Basmati rice brings higher returns, requires less water and can be sown late, factors that attract farmers in the northern Indian states of Punjab and Haryana. These states account for over 70 percent of India's output of the aromatic, long-grain staple, which has been exempted from a rice export ban.
Grain prices set records, more searing heat in forecast
CHICAGO/NEW YORK, July 20 (Reuters) - Grain prices set record highs on Friday and weather forecasts showed little to no relief in sight from the worst U.S. drought in more than half a century, feeding worries about food inflation at home and abroad as supplies dwindle in the world's largest grain exporter.
The United Nations' Food and Agriculture Organization (FAO) said it was concerned about the spike in grain prices, but it did not yet see the current situation as a repeat of the 2007-2008 food crisis when high prices sparked riots in many poor countries.
Speculators boost net long corn stake for 5th straight week
CHICAGO, July 20 (Reuters) - Large speculators raised their net long stake in corn to the biggest in more than three months as the most extensive drought in the United States in 56 years triggered a sharp rise in corn prices, regulatory data released on F rid ay showed.
The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, boosted their net long stake in soybeans to the most since early May in the five trading days ended July 17.
SOFTS-Sugar, coffee slip, worries on Europe debt fester
LONDON, July 23 (Reuters) - Sugar and coffee futures on ICE eased in early trade tracking declines in broader markets as worries on Europe's debt festered.
Cocoa futures dipped following mixed global grindings results this month, clouding the outlook for demand. Sugar markets dipped on light investor dealings, pressured by a stronger dollar.
Ivorian cocoa arrivals seen at 1,285,000 T by July 22
ABIDJAN, July 23 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 1,285,000 tonnes by July 22, exporters estimated on Monday, compared with 1,350,226 tonnes in the same period of the previous season.
Exporters estimated around 12,000 tonnes of beans were delivered to the West African state's two ports between July 16 to July 22, down from 19,687 tonnes in the same week a year ago.
Centam, Mexico, Colombia coffee exports up 22.5 pct in June
GUATEMALA CITY, July 20 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic rose 22.5 percent in June compared to the same month last year, reaching 2.94 million 60-kg bags in the month.
Guatemala's coffee association ANACAFE, which collates figures from the mostly arabica growing region, said Friday exports through the first nine months of the 2011/2012 harvesting season were 20.71 million bags, down 2.3 percent from the same nine-month period in the 2010/2011 season.
Europe Heat Wave Wilting Corn Adds to U.S. Drought: Commodities (Source: Bloomberg)
Heat waves in southern Europe are withering the corn crop and reducing yields in a region that accounts for 16 percent of global exports at a time when U.S. drought already drove prices to a record. Temperatures in a band running from eastern Italy across the Black Sea region into Ukraine reached 35 degrees Celsius (95 degrees Fahrenheit) or more this month, about 5 degrees above normal, U.S. government data show. Corn, now in the pollination phase that creates kernels, risks damage above 32 degrees, said Cedric Weber, the head of market analysis at Bourges, France- based Offre et Demande Agricole, which advises farmers on sales. The heat wave in Europe is adding to concern about global food supplies as U.S. farmers face the worst drought since 1956, India delays sowing because of a late monsoon and Australian crops endure below-average rainfall. Soybeans and corn rose to all-time highs yesterday and wheat surged 51 percent since June 1.
The United Nations says food prices will probably rebound after falling the most in three years in the second quarter. “Everyone is looking to the U.S., but clearly in Europe we’ll need to import a lot of wheat and corn,” said Weber, whose company advises about 5,000 farmers. “That’s just adding to the problems we’ve got everywhere.”
Oil Trades Near One-Week Low After Biggest Drop This Year (Source: Bloomberg)
Oil traded near the lowest level in a week in New York after the biggest drop this year on concern fuel demand is weakening as Europe’s debt crisis threatens to derail the global economy. Futures were little changed after declining 4 percent yesterday, the most since December. The U.S. refinery utilization rate slipped for a second week, according to a Bloomberg survey before a government report tomorrow. Moody’s Investors Service cited “rising uncertainty” about Europe’s debt crisis as it cut the Aaa credit-rating outlook for Germany, the Netherlands and Luxembourg to “negative.” “These are macro factors driving the market,” Michael McCarthy, a chief market strategist at CMC Markets in Sydney, said in a telephone interview today. “In the very short-term we’re looking for further falls.”
Oil for September delivery was at $88.06 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 10:35 a.m. Sydney time. The contract yesterday decreased $3.69 to $88.14, the lowest since July 13. Prices are down 11 percent this year. Brent crude for September settlement was at $103.40 a barrel, up 14 cents, on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $15.34, from $15.12 yesterday.
Iran has small win with China, still losing battle
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, July 23 (Reuters) - Iran appears to have won a small victory with Chinese imports of its crude set to reach a monthly record in July, but any relief in Tehran may be short-lived.
China may buy 590,000 barrels a day from Iran this month, up from 430,000 in June and the 480,000 average for last year, according to Petrologistics, a Geneva-based consultancy.
OIL-Oil slides towards $103 on eurozone fears
LONDON, July 23 (Reuters) - Oil prices slipped towards $103 a barrel as investors sold off riskier assets and fled for the perceived safety of the dollar on fears that Spain will not be able to avoid a costly sovereign bailout.
"There are fears this could be the beginning of a domino effect which ultimately leads to Spain having to join Greece, Portugal and Ireland in asking for an official rescue," said Carsten Fritsch, energy analyst at Commerzbank in Frankfurt.
Italy's Monti in Russia to boost energy cooperation
MOSCOW, July 23 (Reuters) - Russia and Italy ramped up their strategic cooperation on energy as Prime Minister Mario Monti made his first visit to the world's largest oil-producing nation on Monday to refresh ties that were typically warm under his predecessor Silvio Berlusconi.
Technocrat premier Monti met Russian Prime Minister Dmitry Medvedev in Moscow and was due to discuss plans for a major Russian gas export pipeline project to serve southern Europe at talks with President Vladimir Putin in Sochi later.
China's June Iran oil imports at 11-mth high - customs
BEIJING, July 23 (Reuters) - China's crude oil imports from Iran rose to their highest in nearly a year in June despite tough Western sanctions targetting Iran's oil shipments.
State-run Chinese oil firms resumed imports from Iran in April after resolving a dispute over 2012 annual supplies that had led to sharp cuts in oil purchases in the first quarter.
S.Korea's June crude imports from Iran down a quarter
SEOUL, July 23 (Reuters) - South Korea imported just over 176,000 barrels per day of Iranian crude oil in June, down about a quarter from a year ago, as shipments wound down ahead of a complete halt in July due to an EU ban on insuring tankers carrying Iranian oil.
The world's No.4 buyer of Iranian crude imported 34.51 million barrels from Iran during the first six months of this year, down 17.1 percent from the same period a year ago, data from state-run Korea National Oil Corp showed on Monday.
LNG Goes Extra 9,800 Miles as Europe Spurs Record Rates: Freight (Source: Bloomberg)
The biggest collapse in European demand for liquefied natural gas in at least 12 years and record Asian imports are sending fuel cargoes an extra 9,800 miles around the globe and boosting tanker rates to the highest ever. European consumption will drop 20 percent in 2012 as Asian usage jumps 11 percent, according to Sanford C. Bernstein & Co. That’s spurring traders to ship LNG imported into Europe from as far away as Qatar back on the same route and then on to Japan. Vessel rates will rise 54 percent this year, the median of six analyst forecasts compiled by Bloomberg shows. Shares of Golar LNG Ltd. (GOL), which operates nine of them, will gain 26 percent in the next 12 months, according to the average of 12 estimates.
As European economies stagnate, Japan is importing more fuel than ever as it replaces nuclear power shut off after the earthquake and tsunami in March 2011. Two of 50 nuclear plants are operational and LNG prices in the nation, the biggest importer of the fuel, are about 44 percent higher than in Europe. The biggest shortages in the LNG industry are in shipping as the cargo surge overwhelms the fleet’s capacity, according to the Paris-based International Energy Agency. “The shipping market will remain as tight as it is for the next two years,” said Fotis Giannakoulis, an analyst at Morgan Stanley in New York. “The weak European economy is not helping demand and they have excess capacity, so these imported volumes are available to be sent to Asia.”
Brazil’s Vale Seen Posting Best Mining Profit Surprise (Source: Bloomberg)
Vale SA (VALE3) is poised to deliver the biggest earnings surprise this year among the world’s top three mining companies as analysts raise profit projections, while lowering forecasts for BHP Billiton Ltd. (BHP) and Rio Tinto Group. Analysts increased estimates for Vale’s adjusted net income for this year by 7.7 percent in the past four weeks to $16.7 billion, according to data compiled by Bloomberg. Forecasts for BHP, the world’s largest mining company, and Rio Tinto fell 1.3 percent and 6.6 percent, respectively, the data show. The Brazilian real’s 23 percent decline against the U.S. dollar in the past year means cheaper labor and operational costs for Rio de Janeiro-based Vale, which gets about half its sales from exports to Asia. The bulk of BHP and Rio’s operations are in Australia, whose dollar fell 3.5 percent. Vale will benefit from China’s steps to stimulate its economy, said Jonathan Brandt, an analyst at HSBC Holdings Plc.
“Given stimulus measures that we have seen in China, there is a greater risk for a positive surprise than a negative surprise,” Brandt said in a July 20 telephone interview from New York. “The weaker real will help Vale with their cost pressure.”
20120724 1011 Soy Oil & Palm Oil Related News.
Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean futures softened as the day progressed and ended low-range with losses in the 50- to 60-cent range through the March 2013 contract. Early profit-taking pressure triggered sell stops, pushing the November contract as much as its 70-cent daily limit lower. The heavy sales were brought on by a wetter forecast and strong gains in the dollar.
VEGOILS-Palm oil drops to one-month low on Spain fears
SINGAPORE, July 23 (Reuters) - Malaysian crude palm oil futures dropped to the lowest in more than a month tracking broader financial market weakness on fresh concern over Spain's ability to avoid a costly bailout that could worsen the euro zone debt crisis.
Risky financial assets including crude oil and grains futures suffered declines as investors liquidated their positions on concern that the debt crisis could stall global growth and damp fuel and food demand.
Plantation: India’s new import policy boost for CPO export
India’s costlier import duty on refined palm oil would have a negative impact on Malaysian and Indonesian refiners. However, the development could benefit crude palm oil exporters. India also decided to uncap the import tariff on the refined palm oil for the first time ever since 2006 to align it with the international prices to protect its local refiners. Current import price of palm olein is around US$1,050 per tonne. (Financial Daily)
Soybean futures softened as the day progressed and ended low-range with losses in the 50- to 60-cent range through the March 2013 contract. Early profit-taking pressure triggered sell stops, pushing the November contract as much as its 70-cent daily limit lower. The heavy sales were brought on by a wetter forecast and strong gains in the dollar.
VEGOILS-Palm oil drops to one-month low on Spain fears
SINGAPORE, July 23 (Reuters) - Malaysian crude palm oil futures dropped to the lowest in more than a month tracking broader financial market weakness on fresh concern over Spain's ability to avoid a costly bailout that could worsen the euro zone debt crisis.
Risky financial assets including crude oil and grains futures suffered declines as investors liquidated their positions on concern that the debt crisis could stall global growth and damp fuel and food demand.
Plantation: India’s new import policy boost for CPO export
India’s costlier import duty on refined palm oil would have a negative impact on Malaysian and Indonesian refiners. However, the development could benefit crude palm oil exporters. India also decided to uncap the import tariff on the refined palm oil for the first time ever since 2006 to align it with the international prices to protect its local refiners. Current import price of palm olein is around US$1,050 per tonne. (Financial Daily)
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