Bets on Raw Materials Rising Most Since ‘06 as Factories Grow: Commodities (Source: Bloomberg)
Investments in commodities are expanding at the quickest pace in six years on signs of rising economic growth, even as JPMorgan Chase & Co. and Goldman Sachs Group Inc. warn that some prices have rallied too fast. The number of futures contracts on 24 commodities from oil to copper rose 9.3 percent last month, the most since January 2006, according to data compiled by Bloomberg. Speculators are the most bullish since November, Commodity Futures Trading Commission data show. Gold and silver had the best start to a year since 1983, orange juice posted its biggest rally in more than three decades, the LMEX gauge of six industrial metals rose the most since 2006, and cattle futures advanced to a record.
Raw materials are rebounding from the first annual drop in three years on growing signs the world will skirt another recession and reports that manufacturing is expanding from China to India to the U.S. Investors are betting record-low U.S. interest rates and China’s efforts to shore up growth will bolster demand. The optimism is being tempered by Europe’s widening debt crisis, with the International Monetary Fund warning it could derail the global economy.
Corn (Source: CME)
CBOT corn ends slightly higher amid a lack of fresh news, as worries about South American supplies and strong cash prices underpin. Analysts say the market tracked changes in the U.S. dollar. Traders expect crop shortfalls in South America will drive stronger U.S. export sales, and weekly sales released reaffirmed that sales are improving. Still, questions persist about whether demand will fall again as prices climb. CBOT March corn ends up 1c to $6.43 a bushel.
Wheat (Source: CME)
U.S. wheat futures back tracktrack, ending lower amid profit-taking and ideas the market was overbought on Wednesday's rally. Traders say that recent gains on severe cold in Russia and Ukraine may have reflected a "buy the rumor" scenario, and that traders were now selling the fact. Uncertainty about Russian exports limits losses, but traders say even if the country enacts restrictions, world supplies are ample. CBOT March wheat falls 11 1/2c to $6.62 3/4 a bushel, a day after hitting a fresh 4-month high. KCBT Wheat ends down 4 3/4c to $7.17 3/4 and MGEX March wheat closes down 3/4c to $8.36.
Rice (Source: CME)
US rice futures end lower, extending their recent steep drop amid poor demand. Weak demand, both domestically and for export, has weighed on the market for months, and spot futures have hit fresh 8-month lows this week. CBOT March rice ends down 10c to $13.64 per hundredweight.
GRAINS-U.S. grains retreat; traders eye Russia's export decision
NEW DELHI, Feb 2 (Reuters) - U.S. wheat slid around half a percent as investors booked profit, snapping a two-day winning streak fuelled by the possibility that Russia may clamp down on exports after bitter cold ravaged the Black Sea region.
"The fall is a natural corollary after a sharp rise in the past two days, due to concerns over production in the Black Sea and fears that Russia could restrict exports," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.
China plays down rising corn import concern-senior official
BEIJING, Feb 2 (Reuters) - China has not changed its grain import policy and will continue to allow an "appropriate volume" of imports, playing down global concern over rising corn imports by the world's second-largest consumer, a top government agriculture official said on Thursday.
"There is no change regarding the country's grain import and export policy," Chen Xiwen, director of the Office of Central Rural Work Leading Group, the top body which guides the country's agricultural policy, told a news conference.
Cargill, CHS to expand U.S. PNW grain export venture
CHICAGO, Feb 1 - U.S. agribusiness firms Cargill Inc and CHS Inc said on Wednesday they are expanding their joint grain export venture in the Pacific Northwest.
Temco, a 50-50 Cargill-CHS venture which operates a facility in Tacoma, Washington, will expand to include facilities in Kalama, Washington, that is leased by CHS, and the Cargill Irving Elevator at Portland, Oregon, the two firms said in a joint statement.
S.Africa corn output forecast revised down-attache
Feb. 1 - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South Africa:
"Commercial farmers in South Africa planted 2.63 million hectares of corn for the 2011/12 MY (2012/13 MY for South Africa), almost 11 percent more than the previous season's 2.37 million hectares on the back of higher domestic corn prices.
U.S. seeks to idle fragile land amid crop boom
WASHINGTON, Feb 1 (Reuters) - The U.S. government will idle "as many acres as we possibly can" of fragile farmland but record-high grain prices are pulling land into crop production, a senior Agriculture Department official said on Wednesday.
Some 6.5 million acres could return to tillage when Conservation Reserve contracts expire this fall. That's one-fifth of the land in the government's program and may be the largest turnover ever for the reserve, created in 1985 during an agricultural recession.
China to invest in agriculture innovation to boost food security
BEIJING, Feb 1 (Reuters) - China said on Wednesday it would boost agriculture innovation in an effort to increase food output, signaling that the world's most populous country is trying to tackle outdated farm and food infrastructure to feed its people.
China accounts for a fifth of the world's population with less than 9 percent of its arable land, and the cabinet suggested in a document that China's leaders were aiming to get serious about technology to ensure long-term food supplies.
Ukraine exports 1.9 mln T grain in Jan - lobby
KIEV, Feb 1 (Reuters) - Ukraine's grain exports fell by 27 percent to 1.9 million tonnes in January 2012 compared with December 2011, Ukrainian Agrarian Confederation (UAC) grain lobby said on Wednesday.
UAC quoted its director Serhiy Stoyanov as saying the volume included 1.3 million tonnes of maize and 540,000 tonnes of wheat.
India 2011-12 Wheat Output Estimated At 88.31 Mln Tons - Officials (Source: CME)
India's wheat output this crop year is estimated to rise to a record 88.31 million tons due to higher acreage and favorable weather, senior farm ministry officials said. The country's wheat output in the year ended June 30, 2011, was 85.93 million tons. This will be the second straight year of a record crop, boosting the government's plan for introducing a food security program this year that promises cheap foodgrains to the poor and malnourished. Wheat is sown in the winter month of November and its harvesting starts from end-March to early April. Prolonged cold weather across the breadbasket states as well as good soil moisture after the monsoon has improved the crop outlook.
South Africa's 2011-12 Corn Output Seen At 11.5M Tons On Dry Weather (Source: CME)
South Africa's 2011-12 commercial corn production estimate has been revised downwards to 11.5 million metric tons, the U.S. Department of Agriculture's Pretoria attache said in a report released, as dry weather during planting season meant it occurred two to four weeks later than was optimal. Nevertheless, the USDA expects South Africa to be able to export an extra two million tons of corn in 2011-12 due to increased production, with total corn plantings standing almost 9% more than the previous year at 3.13 million hectares. Corn plantings have increased in 2011-12 due to concerns that Argentina's drought would limit global supplies, the USDA said, and because of record high domestic prices caused by exports depleting domestic stock levels. Indeed, the USDA said corn exports will likely slow down over the next few months to reach 2.4 million tons by the end of the 2010-11 marketing year, as current stock levels could be depleted before the start of the new marketing season.
South Africa has already exported almost 2.15 million tons of corn, the USDA said, including 1.47 million tons of white corn and 684,000 tons of yellow corn.
Corn Imports Don't Mean Shortfall In Domestic Market (Source: CME)
China doesn't suffer from a shortage of corn in the domestic market, despite its importing corn, a senior government official said. "We export a considerable amount of corn-based products such as starch and alcohol, and animal products that consume corn," Chen Xiwen, general director of the Office of the Central Rural Work Leading Group, told a news conference. "If we take this into consideration, we export more corn than import," he said, according to a transcript of his remarks published on a central government website. Chen also said some corn imports are aimed at balancing regional demand, and the price of imported corn in south China, a major consuming area, might be lower than domestic corn. China bought about 3 million-4 million metric tons of corn from the U.S. last year to replenish state reserves, traders said.
Farmers, Traders Pack Meeting To Discuss Rice Contract Changes (Source: CME)
Rice farmers, traders and grain elevator managers packed a CME Group Inc. meeting on possible changes to the exchange's futures contract that would tie prices more closely to the cash market. The wide gap between CME futures prices and the price of actual grain in the southern U.S., where most of the crop is grown and processed, has become a sore point for farmers, who have difficulty hedging under such circumstances. The exchange aims for convergence, when the cash-market price and futures price come together as expiration approaches. But the gap has widened in recent years, with futures at times approaching a $2 premium to the cash market. The reason for the widening gap is debated, with some farmers blaming an influx of speculative fund money into futures markets in recent years. Others, including several traders and a procurement agent with Anheuser-Busch Inc., said the weak basis was more a function of poor supply and demand fundamentals, which tend to be reflected in basis.
Traders warned moves to force convergence could reduce liquidity in what is already a thinly traded market. Fred Seamon, a CME economist leading the exchange's look at the issue, said basis started to deteriorate in the last decade as U.S. supplies grew even as world supplies tightened. While CME futures are tied to U.S. supplies, there are few other options for traders around the world who want to trade rice futures. Wednesday's meeting drew roughly 100 people, many who came from the heart of the rice industry in Arkansas and Louisiana, and others who participated by phone. Farmers said the lack of convergence is causing so much uncertainty for rice growers that many are increasingly deciding to plant corn or soybeans instead. "We are losing rice acres to other crops, and the lack of ability to comfortably hedge is a major reason," said John Owen, a Louisiana producer who has chaired a committee with the U.S.A. Rice Federation, a trade group, to examine the issue.
Owen and other proponents of change say the wheat market, which faced similar problems before the CME changed the contract a couple years ago, serves as a "road map" for rice. The changes CME put in place in wheat market allow prices charged by grain-elevator operators to fluctuate, and the rate steadily increased after the new system took effect. Rising storage costs encourage market participants to deliver grain when a futures contract expires, and price convergence depends in part on physical grain being delivered. CME said the wheat market has consistently converged since the changes were enacted in 2010. Critics of the changes to the wheat contract say the variable storage rates have caused their own distortions, with rising rates giving elevators an incentive to keep grains in storage rather and causing artificially high prices for end-users. They also say it has distorted deferred futures contract prices, and chased some speculators out of the market.
Traders also said that thanks to dramatic moves over the past couple of days, cash market prices for rice had essentially converged with futures. Rice futures have tumbled sharply the past couple days, hitting an eight-month low Wednesday. Owen said the exchange could unveil changes as soon Feb. 14, at an industry conference in Washington. Seamon wouldn't confirm that, saying that while he discussed speaking at the conference on changes to the contract, he hadn't yet been formally invited. The Commodity Futures Trading Commission, which pushed for the changes in the wheat contract, "continues to monitor the situation and to encourage the CME and the USA Rice Federation to work together to arrive at a mutually acceptable solution," a spokesman said Wednesday. Changes to encourage convergence do carry risks, and could potentially hurt volume, said Jack Scoville, a broker and vice president of Price Futures Group, and one of a relatively small number of analysts who tracks rice.
"Basically when you force convergence, you're forcing futures down to cash most of the time," Scoville said.
Iran's ships stopped from shipping Ukrainian grain
KIEV, Feb 1 (Reuters) - Traders are no longer booking cargoes on Iranian ships to transport grain exports from Ukraine
because of difficulties with payments following European Union sanctions on Iran, traders said on Wednesday.
"The issue has nothing to do with the government of Ukraine," one Ukrainian trader said. "Traders cannot book Iranian vessels
because banks refuse to transfer money to Iranian companies due to the embargo."
Macquarie sees rise in C/S Brazil cane output
LONDON, Feb 1 (Reuters) - Macquarie Bank sees 2012/13 cane output in the centre-south of Brazil at around 520 million tonnes,
about 5.5 percent up from 493 million in 2011/12, a director said on Wednesday.
"We estimate a range between 515-530 million tonnes in 2012/13 with 520 million tonnes as our best guess at this stage of the
crop," Carlos Murilo Barros de Mello, managing director of the physical and derivatives sugar trading business at Macquarie
in Brazil, said in an emailed interview.
Indonesia's Jan Sumatra coffee bean exports fall 64 pct y/y
JAKARTA, Feb 2 (Reuters) - Robusta coffee bean exports for January from Indonesia's main growing area in Sumatra slumped 64 percent to 6,306.41 tonnes from a year earlier, government trade data showed on Thursday.
Indonesia shipped 17,589.10 tonnes of robusta in the same month a year ago, Muchtar Lutfie, research head of the Indonesia Coffee Exporters Association's (AEKI) Lampung branch, told Reuters.
Brazil CS sugar output slows as harvest ends
BRASILIA, Feb 1 (Reuters) - Sugar production in Brazil's center-south region slowed to a trickle during the first half of January, data from cane industry association Unica showed on Wednesday, as a disappointing harvest draws to a close.
The cane crush from the outset of the season on April 1 until Jan. 16 stood at 492.7 million tonnes, up from 492.2 million tonnes by Jan. 1, Unica said. Sugar production was barely changed from early January at 31.2 million tonnes.
German final season sugar test content up on year
HAMBURG, Feb 1 (Reuters) - The final test on sugar beet delivered to refineries in Germany in the current 2011/12 season showed sugar content of 18.05 percent, the association of German sugar producers WVZ said on Wednesday.
This was up on the average 17.27 percent sugar content for the previous full 2010/11 season.
Exporters absent again from I.Coast cocoa auctions
ABIDJAN, Feb 1 (Reuters) - Ivory Coast conducted a second day of auctions to forward-sell cocoa on Wednesday, but a number of leading export companies continued their boycott in protest over a lack of clarity in the top grower's overhaul of its sector.
The auctions are part of a return to a regulated system aimed at guaranteeing Ivory Coast's farmers a price floor for their produce. It is a precondition for IMF-backed debt relief needed to rebuild the country after last year's civil conflict.
Brent rises above $112 on Iran, promising economic data
SINGAPORE, Feb 2 (Reuters) - Brent crude rose above $112 a barrel, extending gains for a third day on persistent worries over supply from Iran, while upbeat global manufacturing data also boosted appetite for riskier assets.
"We've got a bullish bias and the Chinese PMI data was supportive of that," said Jonathan Barratt, chief executive of Barratt's Bulletin.
Shell eyes big growth, but at big cost
LONDON, Feb 2 (Reuters) - Royal Dutch Shell said it was targeting aggressive growth in the coming years, with the start-up of big new projects and higher investments set to drive a 50 percent rise in cashflow and a 25 percent rise in oil and gas production.
However, weaker-than-expected results for the fourth quarter, partly due to dismal industry-wide refining margins, and an anaemic dividend hike, raised the question of whether Shell was simply running faster to stand still, with investments offering ever-dwindling returns.
Kazakhstan to ban light fuel exports for entire 2012
ASTANA, Feb 2 (Reuters) - Kazakhstan will extend a ban on exports of light refined fuels to the end of this year in a bid to stem re-exports of these oil products from its northern neighbour Russia, the oil and gas minister said on Thursday.
The government regularly suspends exports of oil products at the end of each year to accumulate enough fuel for spring sowing and for harvesting in the summer and autumn. The current temporary ban on oil product exports would have ended on July 1.
Oil in equilibrium at $100 - Mercuria
DAVOS, Feb 1 (Reuters) - Oil prices are comfortable around $100 a barrel and are unlikely to spike much higher for long even if Iranian oil supply is disrupted, the head of energy trading house Mercuria says.
Marco Dunand, chairman of Mercuria Energy Group, told Reuters the oil market had steadied despite turbulence in the Middle East and North Africa over the last year and tension between Iran and the West over Tehran's nuclear programme.
Oil Gains in New York, Trims Weekly Decline Before U.S. Jobs Data Release (Source: Bloomberg)
Oil rose in New York, trimming the biggest weekly decline in more than a month, before a report that may show U.S. employment increased in January. Futures gained as much as 0.4 percent, snapping the longest losing streak since August. Employment climbed by 140,000 last month after rising 200,000 in December and the jobless rate held at an almost three-year low of 8.5 percent, according to a Bloomberg News survey of economists before the Labor Department report. London-traded Brent’s premium to West Texas Intermediate widened to the biggest in 12 weeks yesterday. Crude for March delivery advanced as much as 42 cents to $96.78 a barrel in electronic trading on the New York Mercantile Exchange. It was at $96.71 at 10:08 a.m. Sydney time. The contract fell 1.3 percent to $96.36 a barrel yesterday, the lowest since Dec. 19. Prices are down 2.9 percent this week, the biggest drop since the week ended Dec. 16.
Gold Rises to Two-Month High as Fed’s Bernanke Says U.S. Economy Improving (Source: Bloomberg)
Gold rose to a two-month high after Federal Reserve Chairman Ben S. Bernanke said he sees signs the U.S. economy is improving, boosting prospects for commodity demand. “Indicators of spending, production, and job-market activity have shown some signs of improvement,” Bernanke said today in prepared testimony to the House Budget Committee in Washington. Improving growth prospects will help buoy gold as “deflationary concerns subside,” said Scott Gardner, the chief investment officer at Verdmont Capital SA in Panama. “When economic news comes in better than expected, it boosts commodities, including gold,” Gardner said in an e-mail. Gold futures for April delivery gained 0.6 percent to settle at $1,759.30 an ounce at 1:35 p.m. on the Comex in New York, after reaching $1,763.80, the highest since Dec. 2. The metal climbed 11 percent last month, the biggest January rally since 1983.
Friday, February 3, 2012
Thursday, February 2, 2012
20120202 1816 FCPO EOD Daily Chart Study.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histrogram : falling, seller in charge.
Support : 3050, 3020, 2970, 2950 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed recorded loss with increasing volume exchanged. Soy oil price currently trading lower after last 2 days rebounded higher while crude oil price currently trading lower.
Market reacted poorly to yesterday news on government delayed tax free crude palm oil export quotas.
Technical reading revised to suggesting 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 larger cut loss and profit target.
20120202 1805 FKLI EOD Daily Chart Study.
Bollinger band reading : side way range bound.
MACD Histrogram : recovering, buyer seller battling.
Support : 1515, 1505, 1500, 1494 level.
Resistance : 1530, 1540, 1550, 1565 level.
Comment :
FKLI closed recorded gains with improving volume transacted doing 13.5 points discount compare to cash market that also closed higher. Overnight U.S. market closed recorded small gain and today Asia markets traded ended mostly higher while European markets trading between gain and losses.
Global markets traded higher after Japan, U.S. and Europe recorded improved manufacturing data.
Daily chart study remained suggesting a side way range bound market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.
20120202 1741 Regional Markets EOD Daily Chart Study.
DJIA chart reading : pullback correction upside biased.
Hang Seng chart reading : upside biased.
KLCI chart reading : upside biased with possible pullback correction.
20120202 1727 Global Market & Commodities Related News.
FOREX-Dollar pressured as risk appetite improves
SINGAPORE, Feb 2 (Reuters) - The euro edged higher and the Australian dollar hit a five-month high on Thursday as risk sentiment improved after global manufacturing data allayed the market's worst fears about global growth.
Underscoring its broad retreat, the dollar hovered near a three-month low hit against the yen the previous day, and the U.S. currency also fell against emerging Asian currencies such as the Singapore dollar .
Euro, stocks firm on easing global growth concerns
TOKYO, Feb 2 (Reuters) - Asian shares, the euro and crude oil rose as encouraging manufacturing data soothed fears about the global economic fallout from the euro zone debt crisis, with a drop in European government debt yields also supporting sentiment.
"PMIs in the U.S., China, Germany are more resilient than expected, encouraging heavy money to finally step in as the holy combination of PMIs above 50 and loose monetary policy means buying risk," said Sebastien Galy, strategist at Societe Generale.
High demand whittled record canola crop-trade
WINNIPEG, Manitoba, Feb 1 (Reuters) - Strong export demand for canola chewed through much of Canada's record-large harvest of the oilseed last autumn, leaving year-end stocks slightly smaller than they were a year earlier, according to traders and analysts.
In a Reuters poll, eight traders and analysts estimate, on average, there were 9.1 million tonnes of canola in farm bins and grain elevators on Dec. 31 - down 3.5 percent from a year earlier.
US grains pull back after rally on Russia, cold snap
SYDNEY, Feb 2 (Reuters) - U.S. grain futures dipped onprofit taking in early Asian trade, retreating following a surge in the previous session as icy conditions in Europe threatened the winter wheat crop and Russia weighs up export curbs.
Chinese demand for U.S. soybeans increased this week for shipments through March. Brazilian soybeans were cheaper for shipment in April and beyond. Nearby Brazilian prices supported by strong demand and slow harvest pace and quality concerns due to rain in the north.
Brazil 11/12 soybean crop seen 71.9 mln T-Abiove
SAO PAULO, Feb 1 (Reuters) - Brazil's 2011/12 soybean crop that is now being harvested is seen at 71.9 million tonnes, down from a previous view earlier in the month of 74.6 million tonnes, the grain crushing industry association Abiove said on Wednesday.
Abiove said exports would also fall over the February-January commercial to 33 million tonnes from 34 million tonnes previously forecast.
Brazil CS sugar output slows as harvest ends
BRASILIA, Feb 1 (Reuters) - Sugar production in Brazil's center-south region slowed to a trickle during the first half of January, data from cane industry association Unica showed on Wednesday, as a disappointing harvest draws to a close.
The cane crush from the outset of the season on April 1 until Jan. 16 stood at 492.7 million tonnes, up from 492.2 million tonnes by Jan. 1, Unica said. Sugar production was barely changed from early January at 31.2 million tonnes.
Ukraine 2012 winter grain harvest may fall by 42-58 pct
KIEV, Feb 1 (Reuters) - Ukraine's harvest of winter grains could fall by 42-58 percent to between 10 and 14 million tonnes due to poor weather during sowing and wintering, the state weather forecaster said on Wednesday.
Tetyana Adamenko, head of the agricultural department of Ukraine's meteorological service, told Reuters that Ukrainian winter grains, which had suffered from a severe drought in July-November, now were hit by record frosts of minus 33 degrees Celsius (minus 27 Fahrenheit).
India vegoil imports seen rising as plantings fall
NEW DELHI, Feb 1 (Reuters) - India's rapeseed output is likely to drop by a quarter in the crop year ending June 30, meaning that vegetable oil imports by the world's top buyer could rise by about half a million tonnes in the import year ending Oct. 31, trade officials said.
The expected drop in rapeseed production reflects a likely decline in output in Rajasthan, the north Indian state that produces about half of the country's output.
India coffee exports fall 7.5 pct in Oct-Jan
MUMBAI, Feb 1 (Reuters) - Coffee exports from India fell 7.5 percent to 79,021 tonnes in October-January on lower stocks and rising local demand. Arrivals from the new crop in coming months are expected to stem the fall, though.
In value terms, the exports rose to $243.05 million from $218.91 million a year ago, the Coffee Board said in a statement.
Brent rises toward $112 on Iran, promising economic data
SINGAPORE, Feb 2 (Reuters) - Brent crude rose toward $112 a barrel, extending gains for a third day on persistent worries over supply from Iran, while upbeat global manufacturing data also boosted appetite for riskier assets.
"We've got a bullish bias and the Chinese PMI data was supportive of that," said Jonathan Barratt, chief executive of Barrattsbulletin.com.
China CNOOC aims to triple oil, gas production by 2030
BEIJING, Feb 2 (Reuters) - China National Offshore Oil Corp (CNOOC), parent of CNOOC Ltd , aims to double its oil and gas production by 2020 and triple it by 2030 against the level in 2010, Chairman Wang Yilin said.
CNOOC's oil and gas production from domestic fields in 2010 topped 50 million tonnes of oil equivalent. The company did not give overseas output figures for 2010.
LME copper slips on slow China demand, EU debt woes
SHANGHAI, Feb 2 (Reuters) - London copper slipped as gains in the past month kept Chinese buyers at bay and the euro zone debt crisis continued to weigh on sentiment, but upbeat global manufacturing data is expected to keep a floor under prices. "The market is digesting the supportive PMI numbers, which have confirmed that industrial activity looks considerably better compared to Q4 last year, but there's some uncertainty, especially over the funding stress in Europe," said Stefan Graber, a Credit Suisse Private Banking analyst based in Singapore.
Gold rises to 8-week high, firm euro supports
SINGAPORE, Feb 2 (Reuters) - Gold extended gains,rising to its highest level in nearly two months, as the euro firmed on upbeat global manufacturing data and expectations that a Greek debt deal to avoid a messy default was close at hand.
"Our near-term upside target is $1,780. We think that's going to be taken out within the next six weeks or so," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
Russia's 2011 gold output misses forecast
MOSCOW, Feb 1 (Reuters) - Russian firms produced 209.0 tonnes of gold in 2011, 3.6 percent more than in 2010, but below an earlier forecast, data published on Wednesday by the Gold Industrialists' Union industry lobby showed.
The union expected Russia to produce 211 tonnes of gold last year, up from 202 tonnes in 2010, of which 185 tonnes was expected to be mined.
METALS-LME copper slips on slow China demand, EU debt woes
SHANGHAI, Feb 2 (Reuters) - London copper slipped on Thursday as gains in the past month kept Chinese buyers at bay and the euro zone debt crisis continued to weigh on sentiment, but upbeat global manufacturing data is expected to keep a floor under prices.
Three-month copper on the London Metal Exchange inched down 0.38 percent to $8,408 a tonne by 0436 GMT, partly reversing gains from the previous session. The metal rose 9.5 percent in January, its biggest monthly increase in three.
PRECIOUS-Gold rises to 8-week high, firm euro supports
SINGAPORE, Feb 2 (Reuters) - Gold extended gains on Thursday, rising to its highest level in nearly two months, as the euro firmed on upbeat global manufacturing data and expectations that a Greek debt deal to avoid a messy default was close at hand.
Investors are now eyeing the release of U.S. weekly jobless claims data to gauge the health of the world's largest economy, after higher January factory activity was reported for China, the United States and Germany.
SINGAPORE, Feb 2 (Reuters) - The euro edged higher and the Australian dollar hit a five-month high on Thursday as risk sentiment improved after global manufacturing data allayed the market's worst fears about global growth.
Underscoring its broad retreat, the dollar hovered near a three-month low hit against the yen the previous day, and the U.S. currency also fell against emerging Asian currencies such as the Singapore dollar .
Euro, stocks firm on easing global growth concerns
TOKYO, Feb 2 (Reuters) - Asian shares, the euro and crude oil rose as encouraging manufacturing data soothed fears about the global economic fallout from the euro zone debt crisis, with a drop in European government debt yields also supporting sentiment.
"PMIs in the U.S., China, Germany are more resilient than expected, encouraging heavy money to finally step in as the holy combination of PMIs above 50 and loose monetary policy means buying risk," said Sebastien Galy, strategist at Societe Generale.
High demand whittled record canola crop-trade
WINNIPEG, Manitoba, Feb 1 (Reuters) - Strong export demand for canola chewed through much of Canada's record-large harvest of the oilseed last autumn, leaving year-end stocks slightly smaller than they were a year earlier, according to traders and analysts.
In a Reuters poll, eight traders and analysts estimate, on average, there were 9.1 million tonnes of canola in farm bins and grain elevators on Dec. 31 - down 3.5 percent from a year earlier.
US grains pull back after rally on Russia, cold snap
SYDNEY, Feb 2 (Reuters) - U.S. grain futures dipped onprofit taking in early Asian trade, retreating following a surge in the previous session as icy conditions in Europe threatened the winter wheat crop and Russia weighs up export curbs.
Chinese demand for U.S. soybeans increased this week for shipments through March. Brazilian soybeans were cheaper for shipment in April and beyond. Nearby Brazilian prices supported by strong demand and slow harvest pace and quality concerns due to rain in the north.
Brazil 11/12 soybean crop seen 71.9 mln T-Abiove
SAO PAULO, Feb 1 (Reuters) - Brazil's 2011/12 soybean crop that is now being harvested is seen at 71.9 million tonnes, down from a previous view earlier in the month of 74.6 million tonnes, the grain crushing industry association Abiove said on Wednesday.
Abiove said exports would also fall over the February-January commercial to 33 million tonnes from 34 million tonnes previously forecast.
Brazil CS sugar output slows as harvest ends
BRASILIA, Feb 1 (Reuters) - Sugar production in Brazil's center-south region slowed to a trickle during the first half of January, data from cane industry association Unica showed on Wednesday, as a disappointing harvest draws to a close.
The cane crush from the outset of the season on April 1 until Jan. 16 stood at 492.7 million tonnes, up from 492.2 million tonnes by Jan. 1, Unica said. Sugar production was barely changed from early January at 31.2 million tonnes.
Ukraine 2012 winter grain harvest may fall by 42-58 pct
KIEV, Feb 1 (Reuters) - Ukraine's harvest of winter grains could fall by 42-58 percent to between 10 and 14 million tonnes due to poor weather during sowing and wintering, the state weather forecaster said on Wednesday.
Tetyana Adamenko, head of the agricultural department of Ukraine's meteorological service, told Reuters that Ukrainian winter grains, which had suffered from a severe drought in July-November, now were hit by record frosts of minus 33 degrees Celsius (minus 27 Fahrenheit).
India vegoil imports seen rising as plantings fall
NEW DELHI, Feb 1 (Reuters) - India's rapeseed output is likely to drop by a quarter in the crop year ending June 30, meaning that vegetable oil imports by the world's top buyer could rise by about half a million tonnes in the import year ending Oct. 31, trade officials said.
The expected drop in rapeseed production reflects a likely decline in output in Rajasthan, the north Indian state that produces about half of the country's output.
India coffee exports fall 7.5 pct in Oct-Jan
MUMBAI, Feb 1 (Reuters) - Coffee exports from India fell 7.5 percent to 79,021 tonnes in October-January on lower stocks and rising local demand. Arrivals from the new crop in coming months are expected to stem the fall, though.
In value terms, the exports rose to $243.05 million from $218.91 million a year ago, the Coffee Board said in a statement.
Brent rises toward $112 on Iran, promising economic data
SINGAPORE, Feb 2 (Reuters) - Brent crude rose toward $112 a barrel, extending gains for a third day on persistent worries over supply from Iran, while upbeat global manufacturing data also boosted appetite for riskier assets.
"We've got a bullish bias and the Chinese PMI data was supportive of that," said Jonathan Barratt, chief executive of Barrattsbulletin.com.
China CNOOC aims to triple oil, gas production by 2030
BEIJING, Feb 2 (Reuters) - China National Offshore Oil Corp (CNOOC), parent of CNOOC Ltd , aims to double its oil and gas production by 2020 and triple it by 2030 against the level in 2010, Chairman Wang Yilin said.
CNOOC's oil and gas production from domestic fields in 2010 topped 50 million tonnes of oil equivalent. The company did not give overseas output figures for 2010.
LME copper slips on slow China demand, EU debt woes
SHANGHAI, Feb 2 (Reuters) - London copper slipped as gains in the past month kept Chinese buyers at bay and the euro zone debt crisis continued to weigh on sentiment, but upbeat global manufacturing data is expected to keep a floor under prices. "The market is digesting the supportive PMI numbers, which have confirmed that industrial activity looks considerably better compared to Q4 last year, but there's some uncertainty, especially over the funding stress in Europe," said Stefan Graber, a Credit Suisse Private Banking analyst based in Singapore.
Gold rises to 8-week high, firm euro supports
SINGAPORE, Feb 2 (Reuters) - Gold extended gains,rising to its highest level in nearly two months, as the euro firmed on upbeat global manufacturing data and expectations that a Greek debt deal to avoid a messy default was close at hand.
"Our near-term upside target is $1,780. We think that's going to be taken out within the next six weeks or so," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
Russia's 2011 gold output misses forecast
MOSCOW, Feb 1 (Reuters) - Russian firms produced 209.0 tonnes of gold in 2011, 3.6 percent more than in 2010, but below an earlier forecast, data published on Wednesday by the Gold Industrialists' Union industry lobby showed.
The union expected Russia to produce 211 tonnes of gold last year, up from 202 tonnes in 2010, of which 185 tonnes was expected to be mined.
METALS-LME copper slips on slow China demand, EU debt woes
SHANGHAI, Feb 2 (Reuters) - London copper slipped on Thursday as gains in the past month kept Chinese buyers at bay and the euro zone debt crisis continued to weigh on sentiment, but upbeat global manufacturing data is expected to keep a floor under prices.
Three-month copper on the London Metal Exchange inched down 0.38 percent to $8,408 a tonne by 0436 GMT, partly reversing gains from the previous session. The metal rose 9.5 percent in January, its biggest monthly increase in three.
PRECIOUS-Gold rises to 8-week high, firm euro supports
SINGAPORE, Feb 2 (Reuters) - Gold extended gains on Thursday, rising to its highest level in nearly two months, as the euro firmed on upbeat global manufacturing data and expectations that a Greek debt deal to avoid a messy default was close at hand.
Investors are now eyeing the release of U.S. weekly jobless claims data to gauge the health of the world's largest economy, after higher January factory activity was reported for China, the United States and Germany.
20120202 1143 Global Market & Commodities Related News.
GLOBAL MARKET-Euro, stocks firm on easing global growth concerns
TOKYO, Feb 2 (Reuters) - Asian shares and the euro gained on Thursday as global manufacturing data soothed fears about global economies deteriorating on the back of the ongoing euro zone debt crisis, while falling European debt yields also improved sentiment.
"PMIs in the U.S., China, Germany are more resilient than expected, encouraging heavy money to finally step in as the holy combination of PMIs above 50 and loose monetary policy means buying risk," said Sebastien Galy, strategist at Societe Generale.
COMMODITIES-CRB dips as grains surge, US oil weak
NEW YORK, Feb 1 (Reuters) - Surging grain futures were offset by a decline in U.S. oil and cocoa prices on Wednesday, keeping a lid on commodity markets for a third straight day.
"It's not a question of if they will, it's only a matter of when," Dennis Gartman, a veteran commodities investor, said, referring to the possibility of Beijing launching stimulus measures once its economic growth engine shows signs of fatigue.
Brent crude up as China, Iran outweigh US stockbuild
NEW YORK, Feb 1 (Reuters) - Brent crude rose on Wednesday as upbeat Chinese manufacturing data and concerns about the standoff between Iran and the West outweighed data showing a large build in U.S. oil inventories.
"We feel that an additional expansion of a couple more dollars is likely given the growing contrast between a supply re-build at Cushing and an attempt by European refiners to obtain alternative supply sources ahead of an Iranian embargo," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Europe meets rising gas demand during cold spell
LONDON, Feb 1 (Reuters) - A cold front blamed for more than 40 deaths in Ukraine alone tested Europe's gas supply on Wednesday, but industry officials said stored supply and imports from Russia and Norway were meeting the spike in demand for heating.
Western and northwest Europe are expected to see some reprieve from freezing temperatures by the weekend, putting the focus regarding possible gas shortfalls on parts of Eastern Europe.
Oil in equilibrium at $100 - Mercuria
DAVOS, Feb 1 (Reuters) - Oil prices are comfortable around $100 a barrel and are unlikely to spike much higher for long even if Iranian oil supply is disrupted, the head of energy trading house Mercuria says.
Marco Dunand, chairman of Mercuria Energy Group, told Reuters the oil market had steadied despite turbulence in the Middle East and North Africa over the last year and tension between Iran and the West over Tehran's nuclear programme.
US natgas ends down 5 pct, pressured by weather, supplies
NEW YORK, Feb 1 (Reuters) - U.S. natural gas futures ended lower on Wednesday for a third day as record-high supply levels and mild weather forecasts through mid-February continued to weigh on the market.
"This is a more persistent overhang and will need much more than some token announcements (by producers) to shut in a few molecules here and there to break the back of the glut," Gelber & Associates analyst Pax Saunders said in a report.
Euro Coal-Physical prices drop on ample offers
LONDON, Feb 1 (Reuters) - A rise in offers for coal deliveries clashed with a lack of bids on Wednesday, pulling down European physical coal prices, traders said.
"The offers available are still at too high a price to be taken, so many coal users are still burning stock before taking on new orders," one coal trader said.
TOKYO, Feb 2 (Reuters) - Asian shares and the euro gained on Thursday as global manufacturing data soothed fears about global economies deteriorating on the back of the ongoing euro zone debt crisis, while falling European debt yields also improved sentiment.
"PMIs in the U.S., China, Germany are more resilient than expected, encouraging heavy money to finally step in as the holy combination of PMIs above 50 and loose monetary policy means buying risk," said Sebastien Galy, strategist at Societe Generale.
COMMODITIES-CRB dips as grains surge, US oil weak
NEW YORK, Feb 1 (Reuters) - Surging grain futures were offset by a decline in U.S. oil and cocoa prices on Wednesday, keeping a lid on commodity markets for a third straight day.
"It's not a question of if they will, it's only a matter of when," Dennis Gartman, a veteran commodities investor, said, referring to the possibility of Beijing launching stimulus measures once its economic growth engine shows signs of fatigue.
Brent crude up as China, Iran outweigh US stockbuild
NEW YORK, Feb 1 (Reuters) - Brent crude rose on Wednesday as upbeat Chinese manufacturing data and concerns about the standoff between Iran and the West outweighed data showing a large build in U.S. oil inventories.
"We feel that an additional expansion of a couple more dollars is likely given the growing contrast between a supply re-build at Cushing and an attempt by European refiners to obtain alternative supply sources ahead of an Iranian embargo," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Europe meets rising gas demand during cold spell
LONDON, Feb 1 (Reuters) - A cold front blamed for more than 40 deaths in Ukraine alone tested Europe's gas supply on Wednesday, but industry officials said stored supply and imports from Russia and Norway were meeting the spike in demand for heating.
Western and northwest Europe are expected to see some reprieve from freezing temperatures by the weekend, putting the focus regarding possible gas shortfalls on parts of Eastern Europe.
Oil in equilibrium at $100 - Mercuria
DAVOS, Feb 1 (Reuters) - Oil prices are comfortable around $100 a barrel and are unlikely to spike much higher for long even if Iranian oil supply is disrupted, the head of energy trading house Mercuria says.
Marco Dunand, chairman of Mercuria Energy Group, told Reuters the oil market had steadied despite turbulence in the Middle East and North Africa over the last year and tension between Iran and the West over Tehran's nuclear programme.
US natgas ends down 5 pct, pressured by weather, supplies
NEW YORK, Feb 1 (Reuters) - U.S. natural gas futures ended lower on Wednesday for a third day as record-high supply levels and mild weather forecasts through mid-February continued to weigh on the market.
"This is a more persistent overhang and will need much more than some token announcements (by producers) to shut in a few molecules here and there to break the back of the glut," Gelber & Associates analyst Pax Saunders said in a report.
Euro Coal-Physical prices drop on ample offers
LONDON, Feb 1 (Reuters) - A rise in offers for coal deliveries clashed with a lack of bids on Wednesday, pulling down European physical coal prices, traders said.
"The offers available are still at too high a price to be taken, so many coal users are still burning stock before taking on new orders," one coal trader said.
20120202 1026 Local & Global Economic Related News.
Economy: Malaysia, Australia to sign trade pact in May
Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said the Malaysia-Australia Free Trade Agreement (MAFTA) will be signed this May after the conclusion of the talks on the agreement, slated in March, He said the much-delayed agreement, which was mooted in 2005, would be concluded this year as per aspirations of Prime Minister Datuk Seri Najib Tun Razak and his Australian counterpart, Julia Gillard, when the latter paid an official visit to Canberra. (Bernama)
Economy: Bank Negara keeps key rate at 3%
Bank Negara Malaysia has maintained the Overnight Policy Rate (OPR) at 3%. The central bank said in the recent months, global economic and financial conditions had deteriorated following the escalation of the sovereign debt crisis in Europe, the ongoing fiscal consolidation and the significant policy uncertainties. In the domestic economy, it said, the latest indicators pointed towards continued expansion in 4Q 2011. The central bank said growth was driven by sustained domestic consumption and investment activities, while the external sector showed signs of moderation. It added that the economy is expected to continue to expand, underpinned by sustained private sector economic activity and further reinforced by public sector spending. (Business Times)
Indonesia: Inflation eases, providing scope to keep rates low
Indonesia’s inflation slowed for a fifth straight month in January, bolstering the case for the central bank to keep interest rates low as global growth falters. Consumer prices rose 3.65% last month from a year earlier after climbing 3.79% in December. (Bloomberg)
South Korea: Exports decline on Europe as inflation cools
South Korea’s exports unexpectedly fell for the first time in more than two years and inflation moderated to the slowest pace in 12 months, boosting the case for holding off on interest-rate increases. Overseas shipments dropped 6.6% in January from a year earlier after a revised 10.8% rise in December while consumer prices rose 3.4% from a year earlier, the slowest since Jan 2011 when they gained at the same speed. (Bloomberg)
China: Manufacturing holds up against global slowdown
Chinese manufacturing indexes rose in January as the world's second-biggest economy withstood weaker exports driven by Europe's debt crisis and a government-induced property slowdown. The official purchasing managers' index increased to 50.5 from 50.3 in December. (Bloomberg)
India: Manufacturing up at fastest clip in 8 months
India's manufacturing sector in January hummed along at its fastest clip in eight months, fuelled by new order growth. The HSBC India Manufacturing Purchasing Managers' Index, a key measure of factory production, registered 57.5 in January, up from 54.2 in December accelerating for the second straight month. (Bloomberg)
EU: ECB loan collateral plan said to be avoided by some Euro members
The ECB’s plan to accept more bank loans as collateral may not be used by all euro-region nations, threatening to fragment the rules applying to bank funding operations, said 2 euroarea officials with knowledge of the discussions. The initiative is likely to be implemented on a voluntary basis by national central banks and several of them may opt out, said the officials, who declined to be identified because the information is confidential. Germany’s Bundesbank has indicated it may be among those to shun the measure, arguing the country’s banks don’t need to borrow more from the ECB. An ECB spokesman declined to comment. (Bloomberg)
EU: Leaders sign stricter fiscal pact
EU leaders endorsed a treaty aimed at strengthening accountability and keeping a closer eye on member nations’ efforts to rein in overspending and resolve the region’s debt crisis. European Council President Herman Van Rompuy said the treaty is all about more responsibility and better surveillance. Every country that signs it commits to bringing in a ‘debt brake’ or ‘golden rule’ into its own legislation, and will do so at constitutional or equivalent level. He added that the new voting rules and an automatic correction mechanism will enforce compliance more effectively. 25 member states, including 17 euro-zone countries, are expected to sign the fiscal compact when the leaders next gather in Mac. Only UK and Czech Republic will not be signatories. The treaty will take effect once at least 12 euro nations have ratified it. (MarketWatch)
EU: Draghi stuck with Trichet’s bond plan
The ECB’s bond program, dubbed “temporary” by Jean-Claude Trichet, shows no signs of ending even after 219bn euros ($289bn) of purchases augmented by twice as much in 3 year loans. The ECB, led by Mario Draghi since he replaced Trichet on Nov 1, has bought bonds for its Securities Market Program every week since Aug. (Bloomberg)
UK: Factory gauge rose to 8 month high in Jan
A UK manufacturing index jumped to an 8 month high in Jan and unexpectedly returned to growth after a quarter of contraction as production rebounded. The factory gauge, based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply, rose to 52.1 from a revised 49.7 in Dec. The median forecast of 28 economists in a Bloomberg News survey was for a reading of 50, the level that divides expansion from contraction. (Bloomberg)
Germany: Unemployment fell in Jan German unemployment dropped more than economists forecast to a 2 decade low in Jan, bolstering economic growth as the euro region’s fiscal crisis prompted companies from Spain to Greece to cut jobs. The Nuremberg-based Federal Labor Agency said that the number of people out of work fell a seasonally adjusted 34,000 to 2.85m. Economists predicted a decline of 10,000, the median of 32 forecasts in a Bloomberg News survey showed. (Bloomberg)
France: Consumer spending falls as jobless claims surge
French consumer spending fell in Dec as surging joblessness and concern about looming tax increases prompted households to cut back. National statistics office Insee said that spending fell 0.7% from Nov, when it fell 0.1%. Economists expected an increase of 0.2%, according to the median of 18 estimates gathered by Bloomberg News. Household purchases have hovered around zero since Augand were down 3.1% in Dec from a year earlier, underlining consumer pessimism as Europe’s second-largest economy tips into recession. Jobless claims jumped to as 12-year high of 29,700 in Dec as President Nicolas Sarkozy prepared to implement the second-round of tax increases and spending cuts in less than half a year. (Bloomberg)
Greece: Bondholders said set to get GDP sweetener in debt swap
Greek bondholders may get a sweetener tied to a revival in economic growth to ease the impact of accepting a lower interest rate on the new bonds, sources said. In discussions late last week, creditors lowered their demands for an average coupon on the new 30-year securities they would receive to as little as 3.6% from 4.25% after European officials demanded they take steeper losses. While the move would lead to an estimated loss of 70% or more for investors, adding a GDP warrant – which would pay bondholders more if the Greek economy rebounds – would trim the loss in net present value terms by an estimated 0.5 to 3ppts. (Bloomberg)
Portugal: Borrowing costs fall after ECB action
Portugal’s borrowing costs declined at a successful auction of EUR1.5bn of shorter-term government debt, after the ECB intervened in the country’s sovereign debt market earlier this week to subdue soaring bond yields. The six-month notes due in July 2012 were issued at an average yield of 4.463%, compared with an average yield of 4.74% at a previous auction on 18 Jan. (Bloomberg)
US: Construction spending climbs most in 4 months
Construction spending in US rose in December at the fastest pace in 4 months, reflecting broad-based gains that signal the industry is stabilizing. Building outlays increased 1.5%, the biggest gain since August. (Bloomberg)
US: Treasury plans USD72bn debt as negative yield sale seen
The US Treasury Department said it plans to sell USD72bn in notes and bonds at next week’s quarterly refunding, while a Wall Street advisory panel urged the government to allow negative yields at bill auctions. “In the coming weeks there will be a seasonal increase in borrowing needs ahead of the April 2012 tax season,” the Treasury said in a statement today. “Treasury plans to address this seasonal borrowing need through increases in regular bill auction sizes and cash management bills.” (Bloomberg)
US: Manufacturing bolsters global expansion
Manufacturing in US grew in January at the fastest pace in seven months, adding to signs of a global pickup from Germany to China. The Institute for Supply Management’s index climbed to 54.1, from 53.1 in December. (Bloomberg)
US: Regulators weigh Volcker exemption for sovereign debt
U.S. banking regulators are exploring whether they can exempt sovereign debt from the Dodd-Frank ban on proprietary trading after foreign governments complained that the rule could raise borrowing costs and impede the flow of capital. 5 regulatory agencies are taking public comments on a proposed version of the so-called Volcker rule, which was included in the 2010 financial regulatory overhaul to ban deposit-taking banks from trading with their own money. While foreign government bonds would fall under the rule as proposed, U.S. government debt would be exempt. Officials from Canada, Japan, and UK have sent letters to the Treasury Department and regulators saying the measure would harm their ability to raise money. (Bloomberg)
US: Home prices fall for third straight month
U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market. The S&P/Case-Shiller home-price index shows prices dropped in Nov from Octin 19 of the 20 cities tracked. The biggest declines were in Atlanta, Chicago and Detroit. Phoenix was the only city to show an increase. Prices declined in 18 of the 20 cities in Nov compared to the same month in 2010. Only Washington and Detroit posted year-over-year increases. The decline partly reflects the typical fall slowdown after the peak buying season. Still, prices have fallen 33% nationwide to 2003 levels. (Associated Press)
Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said the Malaysia-Australia Free Trade Agreement (MAFTA) will be signed this May after the conclusion of the talks on the agreement, slated in March, He said the much-delayed agreement, which was mooted in 2005, would be concluded this year as per aspirations of Prime Minister Datuk Seri Najib Tun Razak and his Australian counterpart, Julia Gillard, when the latter paid an official visit to Canberra. (Bernama)
Economy: Bank Negara keeps key rate at 3%
Bank Negara Malaysia has maintained the Overnight Policy Rate (OPR) at 3%. The central bank said in the recent months, global economic and financial conditions had deteriorated following the escalation of the sovereign debt crisis in Europe, the ongoing fiscal consolidation and the significant policy uncertainties. In the domestic economy, it said, the latest indicators pointed towards continued expansion in 4Q 2011. The central bank said growth was driven by sustained domestic consumption and investment activities, while the external sector showed signs of moderation. It added that the economy is expected to continue to expand, underpinned by sustained private sector economic activity and further reinforced by public sector spending. (Business Times)
Indonesia: Inflation eases, providing scope to keep rates low
Indonesia’s inflation slowed for a fifth straight month in January, bolstering the case for the central bank to keep interest rates low as global growth falters. Consumer prices rose 3.65% last month from a year earlier after climbing 3.79% in December. (Bloomberg)
South Korea: Exports decline on Europe as inflation cools
South Korea’s exports unexpectedly fell for the first time in more than two years and inflation moderated to the slowest pace in 12 months, boosting the case for holding off on interest-rate increases. Overseas shipments dropped 6.6% in January from a year earlier after a revised 10.8% rise in December while consumer prices rose 3.4% from a year earlier, the slowest since Jan 2011 when they gained at the same speed. (Bloomberg)
China: Manufacturing holds up against global slowdown
Chinese manufacturing indexes rose in January as the world's second-biggest economy withstood weaker exports driven by Europe's debt crisis and a government-induced property slowdown. The official purchasing managers' index increased to 50.5 from 50.3 in December. (Bloomberg)
India: Manufacturing up at fastest clip in 8 months
India's manufacturing sector in January hummed along at its fastest clip in eight months, fuelled by new order growth. The HSBC India Manufacturing Purchasing Managers' Index, a key measure of factory production, registered 57.5 in January, up from 54.2 in December accelerating for the second straight month. (Bloomberg)
EU: ECB loan collateral plan said to be avoided by some Euro members
The ECB’s plan to accept more bank loans as collateral may not be used by all euro-region nations, threatening to fragment the rules applying to bank funding operations, said 2 euroarea officials with knowledge of the discussions. The initiative is likely to be implemented on a voluntary basis by national central banks and several of them may opt out, said the officials, who declined to be identified because the information is confidential. Germany’s Bundesbank has indicated it may be among those to shun the measure, arguing the country’s banks don’t need to borrow more from the ECB. An ECB spokesman declined to comment. (Bloomberg)
EU: Leaders sign stricter fiscal pact
EU leaders endorsed a treaty aimed at strengthening accountability and keeping a closer eye on member nations’ efforts to rein in overspending and resolve the region’s debt crisis. European Council President Herman Van Rompuy said the treaty is all about more responsibility and better surveillance. Every country that signs it commits to bringing in a ‘debt brake’ or ‘golden rule’ into its own legislation, and will do so at constitutional or equivalent level. He added that the new voting rules and an automatic correction mechanism will enforce compliance more effectively. 25 member states, including 17 euro-zone countries, are expected to sign the fiscal compact when the leaders next gather in Mac. Only UK and Czech Republic will not be signatories. The treaty will take effect once at least 12 euro nations have ratified it. (MarketWatch)
EU: Draghi stuck with Trichet’s bond plan
The ECB’s bond program, dubbed “temporary” by Jean-Claude Trichet, shows no signs of ending even after 219bn euros ($289bn) of purchases augmented by twice as much in 3 year loans. The ECB, led by Mario Draghi since he replaced Trichet on Nov 1, has bought bonds for its Securities Market Program every week since Aug. (Bloomberg)
UK: Factory gauge rose to 8 month high in Jan
A UK manufacturing index jumped to an 8 month high in Jan and unexpectedly returned to growth after a quarter of contraction as production rebounded. The factory gauge, based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply, rose to 52.1 from a revised 49.7 in Dec. The median forecast of 28 economists in a Bloomberg News survey was for a reading of 50, the level that divides expansion from contraction. (Bloomberg)
Germany: Unemployment fell in Jan German unemployment dropped more than economists forecast to a 2 decade low in Jan, bolstering economic growth as the euro region’s fiscal crisis prompted companies from Spain to Greece to cut jobs. The Nuremberg-based Federal Labor Agency said that the number of people out of work fell a seasonally adjusted 34,000 to 2.85m. Economists predicted a decline of 10,000, the median of 32 forecasts in a Bloomberg News survey showed. (Bloomberg)
France: Consumer spending falls as jobless claims surge
French consumer spending fell in Dec as surging joblessness and concern about looming tax increases prompted households to cut back. National statistics office Insee said that spending fell 0.7% from Nov, when it fell 0.1%. Economists expected an increase of 0.2%, according to the median of 18 estimates gathered by Bloomberg News. Household purchases have hovered around zero since Augand were down 3.1% in Dec from a year earlier, underlining consumer pessimism as Europe’s second-largest economy tips into recession. Jobless claims jumped to as 12-year high of 29,700 in Dec as President Nicolas Sarkozy prepared to implement the second-round of tax increases and spending cuts in less than half a year. (Bloomberg)
Greece: Bondholders said set to get GDP sweetener in debt swap
Greek bondholders may get a sweetener tied to a revival in economic growth to ease the impact of accepting a lower interest rate on the new bonds, sources said. In discussions late last week, creditors lowered their demands for an average coupon on the new 30-year securities they would receive to as little as 3.6% from 4.25% after European officials demanded they take steeper losses. While the move would lead to an estimated loss of 70% or more for investors, adding a GDP warrant – which would pay bondholders more if the Greek economy rebounds – would trim the loss in net present value terms by an estimated 0.5 to 3ppts. (Bloomberg)
Portugal: Borrowing costs fall after ECB action
Portugal’s borrowing costs declined at a successful auction of EUR1.5bn of shorter-term government debt, after the ECB intervened in the country’s sovereign debt market earlier this week to subdue soaring bond yields. The six-month notes due in July 2012 were issued at an average yield of 4.463%, compared with an average yield of 4.74% at a previous auction on 18 Jan. (Bloomberg)
US: Construction spending climbs most in 4 months
Construction spending in US rose in December at the fastest pace in 4 months, reflecting broad-based gains that signal the industry is stabilizing. Building outlays increased 1.5%, the biggest gain since August. (Bloomberg)
US: Treasury plans USD72bn debt as negative yield sale seen
The US Treasury Department said it plans to sell USD72bn in notes and bonds at next week’s quarterly refunding, while a Wall Street advisory panel urged the government to allow negative yields at bill auctions. “In the coming weeks there will be a seasonal increase in borrowing needs ahead of the April 2012 tax season,” the Treasury said in a statement today. “Treasury plans to address this seasonal borrowing need through increases in regular bill auction sizes and cash management bills.” (Bloomberg)
US: Manufacturing bolsters global expansion
Manufacturing in US grew in January at the fastest pace in seven months, adding to signs of a global pickup from Germany to China. The Institute for Supply Management’s index climbed to 54.1, from 53.1 in December. (Bloomberg)
US: Regulators weigh Volcker exemption for sovereign debt
U.S. banking regulators are exploring whether they can exempt sovereign debt from the Dodd-Frank ban on proprietary trading after foreign governments complained that the rule could raise borrowing costs and impede the flow of capital. 5 regulatory agencies are taking public comments on a proposed version of the so-called Volcker rule, which was included in the 2010 financial regulatory overhaul to ban deposit-taking banks from trading with their own money. While foreign government bonds would fall under the rule as proposed, U.S. government debt would be exempt. Officials from Canada, Japan, and UK have sent letters to the Treasury Department and regulators saying the measure would harm their ability to raise money. (Bloomberg)
US: Home prices fall for third straight month
U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market. The S&P/Case-Shiller home-price index shows prices dropped in Nov from Octin 19 of the 20 cities tracked. The biggest declines were in Atlanta, Chicago and Detroit. Phoenix was the only city to show an increase. Prices declined in 18 of the 20 cities in Nov compared to the same month in 2010. Only Washington and Detroit posted year-over-year increases. The decline partly reflects the typical fall slowdown after the peak buying season. Still, prices have fallen 33% nationwide to 2003 levels. (Associated Press)
20120202 1025 Malaysia Corporate Related News.
Tebrau Teguh picked to develop Johor land, IWH buys Tebrau Teguh Stake
Property developer Tebrau Teguh, which will see the involvement of construction tycoon Datuk Lim Kang Hoo of Ekovest in the company, has been chosen by the Johor government to develop 161 hectares of land in the southern state. The land, located in Pengerang, Kota TInggi, within the oil and gas industry hub, is to be comprehensive mixed development that complements Petroliam Nasional’s USD20bn (RM60.8bn) refinery and petrochemicals integrated development. (BT)
Tebrau Teguh’s major shareholder Kumpulan Prasarana Rakyat Johor SB (KPRJ) is selling a 33.15% stake in Tebrau Teguh to Iskandar Waterfront Holdings SB (IWH) for RM0.76 per share. The offer is for 222m ordinary shares of RM0.50 each in Tebrau Teguh, which works out to a price tag of RM168.7m. (StarBiz)
IJM, Ahmad Zaki receive letters of acceptance from MRT
IJM Corp and Ahmad Zaki Resources (ARZB) have received the letters of acceptance from MRT Corp that confirm their appointments as the main contractors for the two elevated packages of the My Rapid Transit (MRT) Sungai Buloh-Kajang line. ARZB said the date for the practical completion for the works was 30 June 2016 and the date for line completion for the whole of the works was 31 July 2017. (StarBiz)
Bank Negara maintains OPR at 3%
Bank Negara has maintained the Overnight Policy Rate (OPR) at 3%, after the Monetary Policy Committee meeting. In a statement, the central bank said the global environment would be more challenging and it would continue to assess the risks to domestic growth and inflation. (StarBiz)
BLand sells RM35m worth of BToto shares
Berjaya Land (Bland) has disposed 8.25m Berjaya Sports Toto (BToto) shares worth RM35.16m on 30 Jan 2012, according to a filing to Bursa Malaysia yesterday. Bland said the shares were sold at an average selling price of RM4.26 per share and the money raised would be used as working capital and to repay bank borrowings. (Malaysian Reserve)
Hua Yang to launch affordable houses in Klang Valley
Hua Yang plans to launch affordable housing projects with a total gross development value (GDV) of about RM500m in the Klang Valley in its 2014 financial year. Chief Executive officer Ho Wen Yan said: “We are in the midst of securing landbank for these mixed development projects. The first launch will be in the next financial year”. (Malaysian Reserve)
TNB and Petronas make gas investments in Sabah
Tenaga Nasional Berhad (TNB) and Petroliam Nasional (Petronas) are investing RM2bn in a 300 MW gas plant and liquefied natural gas (LNG) terminal in Sabah. The two projects – the gas plant to be majority owned by TNB with Petronas taking the lead to set up the LNG Terminal – are targeted for completion in 2015. “Before this, it was just approval in principle,” TNB CEO Datuk Seri Che Khalib Mohd Noh told StarBiz. “We are now starting to the environmental impact assessment (EIA) and coming up with the engineering design for the plant soon.” (StarBiz)
UMLand: To start mixed project in downtown Johor Baru
United Malayan Land (UMLand) plans to start its multi-million ringgit mixed development project in Jalan Wong Ah Fook in downtown Johor Baru this year. Group Chief Pee Tong Lim said the project was now in the planning stage which included the GDV, land utilisation and other related development details. He said the company is looking at building a hotel block, a serviced apartment tower and a retail podium on the site. Pee said he hoped the project would start concurrently with the RM1.8bn Johor Baru City Centre transformation plan which is expected to start either in 2Q or 3Q 2012. The land is situated opposite Kompleks Tun Abdul Razak and just a short distance from JB City Square shopping mall. Separately, Pee said the company's joint venture project with UEM Land Bhd, the master developer of Nusajaya at Puteri Harbour, would start early next month. (Starbiz)
MAHB: KLIA2 on track and within budget
MAHB’s chairman Tan Sri Aris Othman said that the development of the new low cost terminal at KLIA2 is on track for completion in Apr 2013. He added that the new terminal was 42% completed as of end-2011 and the cost is still within the RM3.9bn cap. (SunBiz)
MAS: Announced new short haul management structure
MAS announced the management structure of its new short haul airline which is expected to start operations by 2Q 2012. The new airline will be led by Mohammed Rashdan Yusof as CEO, short haul while the overall operations will be managed by Ignatius Ong Ming Choy as COO, short haul. The airline’s operations will be divided into three core functional areas, namely commercial, operations and support services. It will operate the entire narrow-body fleet and short haul routes of MAS, as well as the Firefly ATR turboprop business. (Business Times)
MAS: Joins oneworld's Global explorer fare
The world’s premier global airline alliance, oneworld, will include MAS full global schedule involving around 60 destinations worldwide in its Global Explorer fare starting from Wednesday. MAS said, with the inclusion, the national carrier will be one of the most attractive networks in Southeast Asia for round-the-world fares offered by all members of the alliance and selected other airlines. (Business Times)
DRB-Hicom: To assemble Roadster locally
USF-HICOM (Malaysia) Sdn Bhd’s COO, Mohd Iqbal Shaharom said the wholly-owned subsidiary of DRB-HICOM will assemble 3 wheeler superbike, BRP CAN-AM Spyder roadster locally with an initial investment of RM2m. He said the company will use the Modenas facilities in Gurun, Kedah for the assembling of the superbike. He added that USF-HICOM has targeted to sell 120 units of the superbike by end-Mac. Currently, the company has 45 bookings for the roadster and 96 unit in stocks. (SunBiz)
Proton: GM open to collaboration
General Motors Company (GM), the world’s largest automotive group, is open to any future collaboration with Proton and its new owner DRB-HICOM. GM international operations communications manager Jonathan Rose said in order to strengthen its business, the group is constantly in talks and discussions with possible partners and original equipment manufacturers including Proton. However, he declined to comment further. Rose was representing GM Southeast Asia operations president Stephen K. Carlisle. (Business Times)
Leader Universal: Delisting gets nod
Southeast Asia's largest cable and wire producer Leader Universal Holdings (LUH) is poised to be delisted by the middle of the year. The company on Tuesday received shareholders' approval for its privatisation and will now forward its application to the authorities for its delisting. LUH MD and CEO Datuk Sean H'ng Chun Hsiang said that the delisting is subject to the High Court approval and the company hope to go private by July. (Business Times)
Melewar Industrial: Proposes share capital reduction, rights issue
Melewar Industrial Group (MIG) has proposed a corporate exercise involving a share capital reduction and a renounceable rights issue of up to 150.348m new shares. MIG said at an indicative price of 40 sen per rights share, the rights share would enable it to raise between RM21.97m and RM60.14m. As for the share capital reduction, this would involve cancelling 75 sen of the par value of every existing RM1 share. The share capital reduction would not result in any adjustment to the share price and existing number of shares issued in the company. (Financial Daily)
Automotive: Perodua to develop own model
Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) management said the company is working towards launching its first model in a few years. This moves beyond the current stage where the second national carmaker manufactures Daihatsu models with minimal customizations and rebadge as its own. According to the management, though own model will still be using the platform and engine sourced from Daihatsu, it will look and feel different as Perodua will design the upper body and interior for its target market preference to differentiate its future offerings from those of its partner, Daihatsu Motor Co Ltd. (Financial Daily)
Automotive: Bank Negara asked to ease loan conditions
Second national car manufacturer Perodua, which produces affordable compact cars for the masses, has asked Bank Negara Malaysia to ease up on tight loan conditions for hire purchase of cars imposed effective this year, saying they are affecting car sales. Its MD Datuk Aminar Rashid Salleh said that registration of news cars in Jan dipped by 15%-20% while new orders fell 5% owing to the tighter conditions. Previously, processing for car loans was based on a buyer's gross income, but since Jan, the central bank has directed banks to base loan approvals on net income, in efforts to curb household debt. Processing hire purchase loans also takes longer, between 7-8 days. (Business Times)
Media: Adex up 12% in 2011
Market research firm Nielsen Malaysia said advertisers spent RM10.76bn on media expenditure last year, up 11.9% from 2010. The surprisingly tepid advertising expenditure (adex) growth in 4Q 2011 at 8.3% y-o-y dragged down total adex growth for the year. Adex had soared 15% in 1H 2011, and it continued to expand by double-digit percentage (11.3%) in 3Q 2011. Adex growth for last year came at the bottom end of the 12% to 15% range forecast by media specialists contacted by StarBiz in Nov. (Starbiz)
Plantation: Malaysia Jan palm oil exports fall 12%
Independent market surveyor Intertek said Malaysia’s palm oil exports fell 12% in Jan. A total of 1.32m metric tons of the commodity were tracked on Jan 1 to Jan 31, versus 1.49m tons in the same period in Dec. (Business Times)
Power: Energy panel shortlist by middle of this month
The Energy Commission Malaysia will shortlist by middle of this month candidates from 47 companies, consortium and joint ventures, including 10 foreign firms, which have submitted bids under the competitive bidding process for new combined-cycle power plants. CEO Datuk Ahmad Fauzi Hasan said the commission sent the request for quotation (RFQ) to these prospective bidders on Tuesday. The tender is for 4,500MW of new capacity for 2016 and 2017. About 3,500MW will be needed to replace retiring capacity, while the remaining 1,000MW is additional capacity for the future. The new competitive bidding will replace the expiring agreement of the first-generation independent power producers or the power purchase agreement. (Business Times)
Property developer Tebrau Teguh, which will see the involvement of construction tycoon Datuk Lim Kang Hoo of Ekovest in the company, has been chosen by the Johor government to develop 161 hectares of land in the southern state. The land, located in Pengerang, Kota TInggi, within the oil and gas industry hub, is to be comprehensive mixed development that complements Petroliam Nasional’s USD20bn (RM60.8bn) refinery and petrochemicals integrated development. (BT)
Tebrau Teguh’s major shareholder Kumpulan Prasarana Rakyat Johor SB (KPRJ) is selling a 33.15% stake in Tebrau Teguh to Iskandar Waterfront Holdings SB (IWH) for RM0.76 per share. The offer is for 222m ordinary shares of RM0.50 each in Tebrau Teguh, which works out to a price tag of RM168.7m. (StarBiz)
IJM, Ahmad Zaki receive letters of acceptance from MRT
IJM Corp and Ahmad Zaki Resources (ARZB) have received the letters of acceptance from MRT Corp that confirm their appointments as the main contractors for the two elevated packages of the My Rapid Transit (MRT) Sungai Buloh-Kajang line. ARZB said the date for the practical completion for the works was 30 June 2016 and the date for line completion for the whole of the works was 31 July 2017. (StarBiz)
Bank Negara maintains OPR at 3%
Bank Negara has maintained the Overnight Policy Rate (OPR) at 3%, after the Monetary Policy Committee meeting. In a statement, the central bank said the global environment would be more challenging and it would continue to assess the risks to domestic growth and inflation. (StarBiz)
BLand sells RM35m worth of BToto shares
Berjaya Land (Bland) has disposed 8.25m Berjaya Sports Toto (BToto) shares worth RM35.16m on 30 Jan 2012, according to a filing to Bursa Malaysia yesterday. Bland said the shares were sold at an average selling price of RM4.26 per share and the money raised would be used as working capital and to repay bank borrowings. (Malaysian Reserve)
Hua Yang to launch affordable houses in Klang Valley
Hua Yang plans to launch affordable housing projects with a total gross development value (GDV) of about RM500m in the Klang Valley in its 2014 financial year. Chief Executive officer Ho Wen Yan said: “We are in the midst of securing landbank for these mixed development projects. The first launch will be in the next financial year”. (Malaysian Reserve)
TNB and Petronas make gas investments in Sabah
Tenaga Nasional Berhad (TNB) and Petroliam Nasional (Petronas) are investing RM2bn in a 300 MW gas plant and liquefied natural gas (LNG) terminal in Sabah. The two projects – the gas plant to be majority owned by TNB with Petronas taking the lead to set up the LNG Terminal – are targeted for completion in 2015. “Before this, it was just approval in principle,” TNB CEO Datuk Seri Che Khalib Mohd Noh told StarBiz. “We are now starting to the environmental impact assessment (EIA) and coming up with the engineering design for the plant soon.” (StarBiz)
UMLand: To start mixed project in downtown Johor Baru
United Malayan Land (UMLand) plans to start its multi-million ringgit mixed development project in Jalan Wong Ah Fook in downtown Johor Baru this year. Group Chief Pee Tong Lim said the project was now in the planning stage which included the GDV, land utilisation and other related development details. He said the company is looking at building a hotel block, a serviced apartment tower and a retail podium on the site. Pee said he hoped the project would start concurrently with the RM1.8bn Johor Baru City Centre transformation plan which is expected to start either in 2Q or 3Q 2012. The land is situated opposite Kompleks Tun Abdul Razak and just a short distance from JB City Square shopping mall. Separately, Pee said the company's joint venture project with UEM Land Bhd, the master developer of Nusajaya at Puteri Harbour, would start early next month. (Starbiz)
MAHB: KLIA2 on track and within budget
MAHB’s chairman Tan Sri Aris Othman said that the development of the new low cost terminal at KLIA2 is on track for completion in Apr 2013. He added that the new terminal was 42% completed as of end-2011 and the cost is still within the RM3.9bn cap. (SunBiz)
MAS: Announced new short haul management structure
MAS announced the management structure of its new short haul airline which is expected to start operations by 2Q 2012. The new airline will be led by Mohammed Rashdan Yusof as CEO, short haul while the overall operations will be managed by Ignatius Ong Ming Choy as COO, short haul. The airline’s operations will be divided into three core functional areas, namely commercial, operations and support services. It will operate the entire narrow-body fleet and short haul routes of MAS, as well as the Firefly ATR turboprop business. (Business Times)
MAS: Joins oneworld's Global explorer fare
The world’s premier global airline alliance, oneworld, will include MAS full global schedule involving around 60 destinations worldwide in its Global Explorer fare starting from Wednesday. MAS said, with the inclusion, the national carrier will be one of the most attractive networks in Southeast Asia for round-the-world fares offered by all members of the alliance and selected other airlines. (Business Times)
DRB-Hicom: To assemble Roadster locally
USF-HICOM (Malaysia) Sdn Bhd’s COO, Mohd Iqbal Shaharom said the wholly-owned subsidiary of DRB-HICOM will assemble 3 wheeler superbike, BRP CAN-AM Spyder roadster locally with an initial investment of RM2m. He said the company will use the Modenas facilities in Gurun, Kedah for the assembling of the superbike. He added that USF-HICOM has targeted to sell 120 units of the superbike by end-Mac. Currently, the company has 45 bookings for the roadster and 96 unit in stocks. (SunBiz)
Proton: GM open to collaboration
General Motors Company (GM), the world’s largest automotive group, is open to any future collaboration with Proton and its new owner DRB-HICOM. GM international operations communications manager Jonathan Rose said in order to strengthen its business, the group is constantly in talks and discussions with possible partners and original equipment manufacturers including Proton. However, he declined to comment further. Rose was representing GM Southeast Asia operations president Stephen K. Carlisle. (Business Times)
Leader Universal: Delisting gets nod
Southeast Asia's largest cable and wire producer Leader Universal Holdings (LUH) is poised to be delisted by the middle of the year. The company on Tuesday received shareholders' approval for its privatisation and will now forward its application to the authorities for its delisting. LUH MD and CEO Datuk Sean H'ng Chun Hsiang said that the delisting is subject to the High Court approval and the company hope to go private by July. (Business Times)
Melewar Industrial: Proposes share capital reduction, rights issue
Melewar Industrial Group (MIG) has proposed a corporate exercise involving a share capital reduction and a renounceable rights issue of up to 150.348m new shares. MIG said at an indicative price of 40 sen per rights share, the rights share would enable it to raise between RM21.97m and RM60.14m. As for the share capital reduction, this would involve cancelling 75 sen of the par value of every existing RM1 share. The share capital reduction would not result in any adjustment to the share price and existing number of shares issued in the company. (Financial Daily)
Automotive: Perodua to develop own model
Perusahaan Otomobil Kedua Sdn Bhd’s (Perodua) management said the company is working towards launching its first model in a few years. This moves beyond the current stage where the second national carmaker manufactures Daihatsu models with minimal customizations and rebadge as its own. According to the management, though own model will still be using the platform and engine sourced from Daihatsu, it will look and feel different as Perodua will design the upper body and interior for its target market preference to differentiate its future offerings from those of its partner, Daihatsu Motor Co Ltd. (Financial Daily)
Automotive: Bank Negara asked to ease loan conditions
Second national car manufacturer Perodua, which produces affordable compact cars for the masses, has asked Bank Negara Malaysia to ease up on tight loan conditions for hire purchase of cars imposed effective this year, saying they are affecting car sales. Its MD Datuk Aminar Rashid Salleh said that registration of news cars in Jan dipped by 15%-20% while new orders fell 5% owing to the tighter conditions. Previously, processing for car loans was based on a buyer's gross income, but since Jan, the central bank has directed banks to base loan approvals on net income, in efforts to curb household debt. Processing hire purchase loans also takes longer, between 7-8 days. (Business Times)
Media: Adex up 12% in 2011
Market research firm Nielsen Malaysia said advertisers spent RM10.76bn on media expenditure last year, up 11.9% from 2010. The surprisingly tepid advertising expenditure (adex) growth in 4Q 2011 at 8.3% y-o-y dragged down total adex growth for the year. Adex had soared 15% in 1H 2011, and it continued to expand by double-digit percentage (11.3%) in 3Q 2011. Adex growth for last year came at the bottom end of the 12% to 15% range forecast by media specialists contacted by StarBiz in Nov. (Starbiz)
Plantation: Malaysia Jan palm oil exports fall 12%
Independent market surveyor Intertek said Malaysia’s palm oil exports fell 12% in Jan. A total of 1.32m metric tons of the commodity were tracked on Jan 1 to Jan 31, versus 1.49m tons in the same period in Dec. (Business Times)
Power: Energy panel shortlist by middle of this month
The Energy Commission Malaysia will shortlist by middle of this month candidates from 47 companies, consortium and joint ventures, including 10 foreign firms, which have submitted bids under the competitive bidding process for new combined-cycle power plants. CEO Datuk Ahmad Fauzi Hasan said the commission sent the request for quotation (RFQ) to these prospective bidders on Tuesday. The tender is for 4,500MW of new capacity for 2016 and 2017. About 3,500MW will be needed to replace retiring capacity, while the remaining 1,000MW is additional capacity for the future. The new competitive bidding will replace the expiring agreement of the first-generation independent power producers or the power purchase agreement. (Business Times)
20120202 1019 Global Market Related News.
Asian Stocks Rise for Third Day on Global Outlook; Glitch Hits Tokyo Trade (Source: Bloomberg)
Asian stocks advanced for a third day, with the regional benchmark index heading for its highest close in three months, as manufacturing gained in the U.S. and Europe, boosting confidence the global economy is recovering. LG Electronics Inc. (066570), the world’s third-largest maker of mobile phones, climbed 5.9 percent in Seoul. James Hardie Industries SE, the building materials supplier that counts the U.S. as its top market, jumped 4.9 percent in Sydney as construction spending in America rose in December at the fastest pace in four months. Trading in 241 stocks including Sony Corp and Hitachi Ltd. was halted on the Tokyo Stock Exchange due to a technical glitch, bourse spokeswoman Yukari Hozumi said by phone.
“We got more confirmation that business confidence in the U.S. and Europe is improving” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The European debt crisis is in a temporary lull, so stocks sensitive to the economy will have a chance to gain.”
Japan Stocks Rise as Manufacturing Gains in U.S., Europe Boost Confidence (Source: Bloomberg)
Japanese stocks rose, pushing the Nikkei 225 Stock Average toward a three-day gain, as expanding manufacturing in the U.S. and Europe boosted confidence in the global economic recovery. Canon Inc. (7751), a camera maker that gets 80 percent of its sales overseas, rose 0.8 percent. Honda Motor Co., Japan’s second-largest carmaker by revenue, gained 2.9 percent after a jump in U.S. sales following an eight-month slump. Nomura Holdings Inc. (8604) soared 6.8 percent after the brokerage posted an unexpected quarterly profit on asset sales even as trading commissions fell. “We have more confirmation that business confidence in the U.S. and Europe is improving,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The European debt crisis is in a temporary lull, so stocks sensitive to the global economy will have a chance to gain.”
U.S. Stocks Advance Amid Optimism About Global Manufacturing (Source: Bloomberg)
U.S. stocks advanced, snapping a four-day decline in the Standard & Poor’s 500 Index, amid signs that manufacturing across the world is strengthening. Financial (S5FINL) and industrial shares in the S&P 500 rose at least 1.1 percent to lead gains among 10 groups. Morgan Stanley and Bank of America Corp. added more than 3.2 percent. Whirlpool (WHR) Corp. surged 13 percent as the appliance maker projected earnings that beat forecasts. Technology companies in the benchmark index rallied to an 11 year-high. Broadcom (BRCM) Corp. jumped 8.1 percent as it forecast sales that may top estimates. The S&P 500 increased 0.9 percent to 1,324.09 at 4 p.m. New York time, following the biggest January advance in 15 years. The Dow Jones Industrial Average rallied 83.55 points, or 0.7 percent, to 12,716.46, trimming an earlier 152-point gain that sent it above its highest close since May. The Russell 2000 Index of small companies jumped 2.1 percent to 809.66.
European Stocks Rise to a Six-Month High as Manufacturing Gauges Increase (Source: Bloomberg)
European (SXXP) stocks advanced to a six- month high, with the Stoxx Europe 600 Index extending its best start to a year since 1998, as gauges of manufacturing increased from America to the euro area to China. Banks and carmakers led gains. ICAP Plc (IAP) jumped 7.7 percent after saying annual pretax profit will be at the “upper end” of the range of analysts’ estimates. RWE AG (RWE) climbed 4.9 percent after Morgan Stanley added the stock to its best ideas list. The Stoxx 600 rose 2 percent to 259.51 at the close in London, its highest level since August. The benchmark gauge rallied 4 percent last month, the biggest January gain since 1998, as the U.S. economy maintained its recovery and speculation grew that European (SXXP) policy makers will contain the region’s debt crisis.
Global Strategists Abandoning Bearish Views After Missing Rally (Source: Bloomberg)
Strategists at the biggest banks are capitulating on their bearish forecasts after the best start to a year for global stocks since 1994 and gains of more than 7 percent in emerging-market currencies. Just two weeks after saying that investors should “remain cautious,” Larry Hatheway, the chief economist at UBS AG (UBSN), raised his recommendations on global shares and high-yield bonds in a Jan. 23 note to customers entitled, “Wrong, but not too late.” Royal Bank of Scotland Group Plc (RBS), and Benoit Anne, the global head of emerging-markets strategy at Societe Generale (GLE) SA, said their estimates for developing nations were proven wrong.
The MSCI All-Country World Index (MXWD) climbed 5.7 percent in January, surprising strategists at Bank of America Corp. (BAC), Goldman Sachs Group Inc. (GS) and Barclays Plc (BARC) who had forecast first-half losses because of Europe’s debt crisis. JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), which predicted the rally in stocks, say it will continue as the U.S. housing market rebounds and China eases lending restrictions to bolster economic growth.
Dollar at 3-mth lows on yen, euro under pressure
TOKYO, Feb 1 (Reuters) - The dollar hovered at three-month lows against the yen and looked poised to lose ground for a fifth straight day, pressured by the Federal Reserve's pledge last week that it would keep interest rates near zero at least until late 2014.
"The Fed's decision is being slowly priced in the market, and it seems the dollar may stay pressured around the current levels at least until Friday's U.S. jobs data," said Koji Fukaya, chief currency analyst at Credit Suisse in Tokyo.
Manufacturing Gains in U.S. Bolster Outlook for Global Expansion: Economy (Source: Bloomberg)
Manufacturing in the U.S. grew in January at the fastest pace in seven months, adding to signs of a global pickup from Germany to China. The Institute for Supply Management’s index climbed to 54.1, from 53.1 in December, the Tempe, Arizona-based group’s report showed today. Figures greater than 50 signal expansion. Other reports showed U.S. construction spending increased at the fastest pace in four months and companies added 170,000 workers to payrolls in January. Stocks rose on optimism the factory reports show the world economy is withstanding fallout from Europe’s debt crisis. Production, led by inventory rebuilding at the end of 2011, is poised to keep expanding in the U.S. as the need to update equipment drives orders at companies like Caterpillar Inc. (CAT) and demand for cars rises.
Fed Bank Presidents Reveal Assets From Ranchland to Inflation-Linked Bonds (Source: Bloomberg)
Federal Reserve regional bank presidents revealed unprecedented details about their personal wealth, disclosing Citigroup Inc. (C) shares bought by accident and ownership of a Missouri farm and Texas ranchland. The regional bank chiefs, who manage Fed operations across the country ranging from bank supervision to emergency lending, disclosed the documents yesterday in response to requests from Bloomberg News under the Freedom of Information Act. The Fed banks said they weren’t subject to the terms of the act, even as they responded to the requests. The 12 regional banks and their presidents aren’t held to the same level of public scrutiny as the Washington-based Federal Reserve Board and its governors. While Chairman Ben S. Bernanke and Fed governors disclose information about their finances and are subject to the FOIA, the regional banks don’t routinely make personal financial information public.
Companies in U.S. Added 170,000 Workers to Payrolls in January, ADP Says (Source: Bloomberg)
Companies added 170,000 workers in January, reflecting job gains in services and at small businesses, according to a private report based on payrolls. The increase was less than forecast and followed a revised 292,000 rise the prior month that was smaller than previously reported, the report from the Roseland, New Jersey-based ADP Employer Services showed today. The median estimate in a Bloomberg News survey of economists called for an advance of 182,000. “The job market continues to grow at a moderate pace,” Jonathan Basile, a senior economist at Credit Suisse in New York, said before the report. “We’re on a gradually improving path for the labor market.”
Negative Treasury Bill Auction Yields Would Avoid ‘Grab-a-Thon,’ CRT Says (Source: Bloomberg)
Letting investors buy short-term bills with negative yields at auction would make the market more efficient, according to CRT Capital Group LLC. The Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association unanimously recommended that the government allow for its auctions of bills to price at negative yields “as soon as logistically practical,” according to the group’s report yesterday to Treasury Secretary Timothy F. Geithner, released today. Investors bid a record 9.07 times the $30 billion in four-week bills sold by the Treasury Department on Dec. 20 at zero yield in one of 12 auctions since the beginning of September at which investors paid the full face value to own the shortest-maturity U.S. government debt. The average ratio of bids to debt sold, known as the bid-to-cover ratio, was 6.01 at the past 10 offerings, with the yield averaging 0.011 percent.
Treasuries Decline on Speculation U.S. Reports Will Show Jobs Improvement (Source: Bloomberg)
Treasuries fell for a second day before reports today and tomorrow that economist said will show U.S. employment grew in January. Government securities extended losses from yesterday in New York when industry figures showed manufacturing expanded in January at the fastest pace since June, crimping demand for the safety of sovereign debt. Ten-year yields rose two basis points to 1.85 percent as of 9:34 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in November 2021 fell 5/32, or $1.56 per $1,000 face amount, to 101 3/8. The yield increased three basis points, or 0.03 percentage point, yesterday. It is 18 basis points away from the record low set in September.
Obama Plans Assistance for Refinancing (Source: Bloomberg)
President Barack Obama announced a package of proposals designed to jolt the housing market, his latest effort to reignite the economy after four years of foreclosures and falling home prices. “This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said in a speech in the Washington suburb of Falls Church, Virginia. “We need to do everything in our power to repair the damage and make responsible families whole.” The president said his plan would make it easier for homeowners to refinance their mortgages into current low interest rates, which are now below 4 percent. Borrowers, even those who owe more than their homes are worth, would be able to refinance into loans guaranteed by the Federal Housing Administration.
Construction Spending in U.S. Climbs Most in Four Months in Stability Sign (Source: Bloomberg)
Construction spending in the U.S. rose in December at the fastest pace in four months, reflecting broad- based gains that signal the industry is stabilizing. Building outlays increased 1.5 percent, the biggest gain since August, Commerce Department figures showed today in Washington. The median estimate of 51 economists in a Bloomberg survey called for a 0.5 percent rise. A housing market that is gaining some steam as builders begin apartment projects may breathe life into the industry that’s struggled since triggering the recession in 2007. At the same time, decreased spending by the government may temper progress in construction as a whole.
Dollar Falls for Second Day Versus Euro on Stocks Rally, Before Jobs Data (Source: Bloomberg)
The dollar fell against the euro the euro for a second day as Asian stocks extended a global rally, damping demand for haven currencies. The yen maintained a decline from yesterday versus the 17- nation currency before U.S. data that economists said will show fewer Americans filed for jobless benefits, adding to evidence that the world’s largest economy is picking up. A gauge of volatility for the yen climbed to the highest this year amid speculation Japan’s government will intervene in the foreign- exchange market. “Risk appetite is fairly positive at the moment, and this could continue for a couple of weeks,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency-risk management company. “Typical safe-haven currencies have taken a step back now,” he said, referring to the dollar and yen.
Facebook Files to Raise $5B in Biggest Internet IPO (Source: Bloomberg)
Facebook Inc. (FB), the social-networking website that in eight years changed the way the world communicates, filed to raise $5 billion in the largest Internet initial public offering on record. Facebook, whose meteoric rise spawned an Oscar-winning film and captivated Wall Street, today named Morgan Stanley as the lead underwriter on the IPO, while reporting a 24-fold increase in sales over the past four years to $3.71 billion in 2011. The planned IPO dwarfs Google Inc. (GOOG)’s 2004 offering and tests whether social-networking providers deserve valuations that surpass such established companies as International Business Machines Corp. (IBM) and Procter & Gamble Co. The Menlo Park, California-based company is considering a valuation of $75 billion to $100 billion, two people with knowledge of the matter said last week.
China’s Manufacturing Industry Holds Up Against Global Slowdown: Economy (Source: Bloomberg)
Chinese manufacturing indexes rose in January as the world’s second-biggest economy withstood weaker exports driven by Europe’s debt crisis and a government-induced property slowdown. The official purchasing managers’ index increased to 50.5 from 50.3 in December, exceeding the median estimate in a Bloomberg News survey for a reading below the 50 level that divides expansion from contraction. The data may have been distorted by a weeklong holiday. A separate gauge from HSBC Holdings Plc and Markit Economics rose to 48.8. India’s manufacturing grew at the fastest pace in eight months. Premier Wen Jiabao yesterday reiterated his government will “fine-tune” economic policies as needed after the central bank held off on a reduction in bank-reserve requirements that some analysts had forecast for January.
Indexes for export orders, imports and employment in the official PMI showed a deeper decline, underscoring an International Monetary Fund warning last week that the euro area’s crisis could trigger another global recession.
Hong Kong Homes Face 25% Drop in Year of the Dragon: Mortgages (Source: Bloomberg)
The Year of the Dragon, representing wealth and power in China, is shaping up to be the opposite for the world’s costliest housing market, Hong Kong. Mortgages (HKMGLEND) that need to be insured by the government because of risk experienced the steepest plunge in six years in 2011, a sign the biggest home price decline since the global credit crisis is accelerating. Property prices that have slid 6 percent since June may fall as much as 25 percent by 2013, estimates Andrew Lawrence of Barclays Capital, who predicted the initial slide in April. Asian real estate markets from Singapore to Beijing to Mumbai are stalling or have started declining as governments seek to curb the type of housing bubble that brought down the U.S. economy. In Hong Kong, rising borrowing costs, extra transaction taxes and higher down-payment requirements imposed by the government have fueled the slump.
ECB Plan for Loans as Collateral Said to Be Avoided by Some Euro Members (Source: Bloomberg)
The European Central Bank’s plan to accept more bank loans as collateral may not be used by all euro-region nations, threatening to fragment the rules applying to bank funding operations, said two euro-area officials with knowledge of the discussions. The initiative is likely to be implemented on a voluntary basis by national central banks and several of them may opt out, said the officials, who declined to be identified because the information is confidential. Germany’s Bundesbank has indicated it may be among those to shun the measure, arguing the country’s banks don’t need to borrow more from the ECB. An ECB spokesman declined to comment. “It contradicts the idea that all banks are treated equally in the euro area,” said Klaus Baader, co-head of economic research at Societe Generale SA in London. “It creates a two-class society. Central banks that take part are therefore identifying themselves as ones that are dealing with a weak banking system.”
Manufacturing Output in U.K. Unexpectedly Returns to Growth After Declines (Source: Bloomberg)
A U.K. manufacturing index jumped to an eight-month high in January and unexpectedly returned to growth after a quarter of contraction as production rebounded. The factory gauge, based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply, rose to 52.1 from a revised 49.7 in December, Markit said in a report on its website today. The median forecast of 28 economists in a Bloomberg News survey was for a reading of 50, the level that divides expansion from contraction. Separate reports today showed manufacturing indexes for Europe, China and India also rose in January. Still, the debt crisis in the euro area, the U.K.’s biggest export market, has dimmed the outlook for manufacturers, and Bank of England Governor Mervyn King said last week that policy makers can increase stimulus again if needed to aid the economy.
Spain Said to Plan to Buy CoCo Bonds From Banks as Part of Industry Revamp (Source: Bloomberg)
Spain will offer to inject funds into lenders that agree to merge as part of the government’s plan to overhaul the industry and shepherd weaker banks into tie-ups, said a person familiar with the process. The state will buy contingent convertible bonds, or CoCos, which convert to equity when banks’ capital ratio slips below a certain level, yielding 8 percent, said the person, who declined to be named because the plan hasn’t been made public. Spain, which pays about 5 percent to borrow for 10 years, will issue debt to buy the securities, even though the plan will have no impact on the budget deficit, the person said. Lenders that agree to merge will also have longer to apply new provisioning rules that the government will announce on Feb. 3 as part of the overhaul, the person said.
Fernandez Curbing Imports Leaves Argentines Searching in Vain for Fridges (Source: Bloomberg)
Retiree Teresa Teffer searched branches of Argentina’s leading appliance retailers for a fridge and oven she’d seen on display less than two months earlier. She gave up after finding neither. “They have nothing to offer me,” the 71-year-old said as she left an SACI Falabella (FALAB) store in Buenos Aires’s Alto Avellaneda shopping mall. “There are only a couple of lesser- known brands. The government is forcing me to buy what it wants and not what I want.” Consumers face fewer choices in everything from blenders to computer parts as President Cristina Fernandez de Kirchner curbs imports to shore up a dwindling trade surplus and protect manufacturers whose competitiveness is suffering from a peso that’s not weakening fast enough to offset inflation. The restrictions forced automaker Fiat SpA (F)’s local unit to suspend production this month and prompted Brazil’s Trade Minister Fernando Pimentel to say that neighboring Argentina is a “permanent problem.”
Asian stocks advanced for a third day, with the regional benchmark index heading for its highest close in three months, as manufacturing gained in the U.S. and Europe, boosting confidence the global economy is recovering. LG Electronics Inc. (066570), the world’s third-largest maker of mobile phones, climbed 5.9 percent in Seoul. James Hardie Industries SE, the building materials supplier that counts the U.S. as its top market, jumped 4.9 percent in Sydney as construction spending in America rose in December at the fastest pace in four months. Trading in 241 stocks including Sony Corp and Hitachi Ltd. was halted on the Tokyo Stock Exchange due to a technical glitch, bourse spokeswoman Yukari Hozumi said by phone.
“We got more confirmation that business confidence in the U.S. and Europe is improving” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The European debt crisis is in a temporary lull, so stocks sensitive to the economy will have a chance to gain.”
Japan Stocks Rise as Manufacturing Gains in U.S., Europe Boost Confidence (Source: Bloomberg)
Japanese stocks rose, pushing the Nikkei 225 Stock Average toward a three-day gain, as expanding manufacturing in the U.S. and Europe boosted confidence in the global economic recovery. Canon Inc. (7751), a camera maker that gets 80 percent of its sales overseas, rose 0.8 percent. Honda Motor Co., Japan’s second-largest carmaker by revenue, gained 2.9 percent after a jump in U.S. sales following an eight-month slump. Nomura Holdings Inc. (8604) soared 6.8 percent after the brokerage posted an unexpected quarterly profit on asset sales even as trading commissions fell. “We have more confirmation that business confidence in the U.S. and Europe is improving,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The European debt crisis is in a temporary lull, so stocks sensitive to the global economy will have a chance to gain.”
U.S. Stocks Advance Amid Optimism About Global Manufacturing (Source: Bloomberg)
U.S. stocks advanced, snapping a four-day decline in the Standard & Poor’s 500 Index, amid signs that manufacturing across the world is strengthening. Financial (S5FINL) and industrial shares in the S&P 500 rose at least 1.1 percent to lead gains among 10 groups. Morgan Stanley and Bank of America Corp. added more than 3.2 percent. Whirlpool (WHR) Corp. surged 13 percent as the appliance maker projected earnings that beat forecasts. Technology companies in the benchmark index rallied to an 11 year-high. Broadcom (BRCM) Corp. jumped 8.1 percent as it forecast sales that may top estimates. The S&P 500 increased 0.9 percent to 1,324.09 at 4 p.m. New York time, following the biggest January advance in 15 years. The Dow Jones Industrial Average rallied 83.55 points, or 0.7 percent, to 12,716.46, trimming an earlier 152-point gain that sent it above its highest close since May. The Russell 2000 Index of small companies jumped 2.1 percent to 809.66.
European Stocks Rise to a Six-Month High as Manufacturing Gauges Increase (Source: Bloomberg)
European (SXXP) stocks advanced to a six- month high, with the Stoxx Europe 600 Index extending its best start to a year since 1998, as gauges of manufacturing increased from America to the euro area to China. Banks and carmakers led gains. ICAP Plc (IAP) jumped 7.7 percent after saying annual pretax profit will be at the “upper end” of the range of analysts’ estimates. RWE AG (RWE) climbed 4.9 percent after Morgan Stanley added the stock to its best ideas list. The Stoxx 600 rose 2 percent to 259.51 at the close in London, its highest level since August. The benchmark gauge rallied 4 percent last month, the biggest January gain since 1998, as the U.S. economy maintained its recovery and speculation grew that European (SXXP) policy makers will contain the region’s debt crisis.
Global Strategists Abandoning Bearish Views After Missing Rally (Source: Bloomberg)
Strategists at the biggest banks are capitulating on their bearish forecasts after the best start to a year for global stocks since 1994 and gains of more than 7 percent in emerging-market currencies. Just two weeks after saying that investors should “remain cautious,” Larry Hatheway, the chief economist at UBS AG (UBSN), raised his recommendations on global shares and high-yield bonds in a Jan. 23 note to customers entitled, “Wrong, but not too late.” Royal Bank of Scotland Group Plc (RBS), and Benoit Anne, the global head of emerging-markets strategy at Societe Generale (GLE) SA, said their estimates for developing nations were proven wrong.
The MSCI All-Country World Index (MXWD) climbed 5.7 percent in January, surprising strategists at Bank of America Corp. (BAC), Goldman Sachs Group Inc. (GS) and Barclays Plc (BARC) who had forecast first-half losses because of Europe’s debt crisis. JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), which predicted the rally in stocks, say it will continue as the U.S. housing market rebounds and China eases lending restrictions to bolster economic growth.
Dollar at 3-mth lows on yen, euro under pressure
TOKYO, Feb 1 (Reuters) - The dollar hovered at three-month lows against the yen and looked poised to lose ground for a fifth straight day, pressured by the Federal Reserve's pledge last week that it would keep interest rates near zero at least until late 2014.
"The Fed's decision is being slowly priced in the market, and it seems the dollar may stay pressured around the current levels at least until Friday's U.S. jobs data," said Koji Fukaya, chief currency analyst at Credit Suisse in Tokyo.
Manufacturing Gains in U.S. Bolster Outlook for Global Expansion: Economy (Source: Bloomberg)
Manufacturing in the U.S. grew in January at the fastest pace in seven months, adding to signs of a global pickup from Germany to China. The Institute for Supply Management’s index climbed to 54.1, from 53.1 in December, the Tempe, Arizona-based group’s report showed today. Figures greater than 50 signal expansion. Other reports showed U.S. construction spending increased at the fastest pace in four months and companies added 170,000 workers to payrolls in January. Stocks rose on optimism the factory reports show the world economy is withstanding fallout from Europe’s debt crisis. Production, led by inventory rebuilding at the end of 2011, is poised to keep expanding in the U.S. as the need to update equipment drives orders at companies like Caterpillar Inc. (CAT) and demand for cars rises.
Fed Bank Presidents Reveal Assets From Ranchland to Inflation-Linked Bonds (Source: Bloomberg)
Federal Reserve regional bank presidents revealed unprecedented details about their personal wealth, disclosing Citigroup Inc. (C) shares bought by accident and ownership of a Missouri farm and Texas ranchland. The regional bank chiefs, who manage Fed operations across the country ranging from bank supervision to emergency lending, disclosed the documents yesterday in response to requests from Bloomberg News under the Freedom of Information Act. The Fed banks said they weren’t subject to the terms of the act, even as they responded to the requests. The 12 regional banks and their presidents aren’t held to the same level of public scrutiny as the Washington-based Federal Reserve Board and its governors. While Chairman Ben S. Bernanke and Fed governors disclose information about their finances and are subject to the FOIA, the regional banks don’t routinely make personal financial information public.
Companies in U.S. Added 170,000 Workers to Payrolls in January, ADP Says (Source: Bloomberg)
Companies added 170,000 workers in January, reflecting job gains in services and at small businesses, according to a private report based on payrolls. The increase was less than forecast and followed a revised 292,000 rise the prior month that was smaller than previously reported, the report from the Roseland, New Jersey-based ADP Employer Services showed today. The median estimate in a Bloomberg News survey of economists called for an advance of 182,000. “The job market continues to grow at a moderate pace,” Jonathan Basile, a senior economist at Credit Suisse in New York, said before the report. “We’re on a gradually improving path for the labor market.”
Negative Treasury Bill Auction Yields Would Avoid ‘Grab-a-Thon,’ CRT Says (Source: Bloomberg)
Letting investors buy short-term bills with negative yields at auction would make the market more efficient, according to CRT Capital Group LLC. The Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association unanimously recommended that the government allow for its auctions of bills to price at negative yields “as soon as logistically practical,” according to the group’s report yesterday to Treasury Secretary Timothy F. Geithner, released today. Investors bid a record 9.07 times the $30 billion in four-week bills sold by the Treasury Department on Dec. 20 at zero yield in one of 12 auctions since the beginning of September at which investors paid the full face value to own the shortest-maturity U.S. government debt. The average ratio of bids to debt sold, known as the bid-to-cover ratio, was 6.01 at the past 10 offerings, with the yield averaging 0.011 percent.
Treasuries Decline on Speculation U.S. Reports Will Show Jobs Improvement (Source: Bloomberg)
Treasuries fell for a second day before reports today and tomorrow that economist said will show U.S. employment grew in January. Government securities extended losses from yesterday in New York when industry figures showed manufacturing expanded in January at the fastest pace since June, crimping demand for the safety of sovereign debt. Ten-year yields rose two basis points to 1.85 percent as of 9:34 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security due in November 2021 fell 5/32, or $1.56 per $1,000 face amount, to 101 3/8. The yield increased three basis points, or 0.03 percentage point, yesterday. It is 18 basis points away from the record low set in September.
Obama Plans Assistance for Refinancing (Source: Bloomberg)
President Barack Obama announced a package of proposals designed to jolt the housing market, his latest effort to reignite the economy after four years of foreclosures and falling home prices. “This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said in a speech in the Washington suburb of Falls Church, Virginia. “We need to do everything in our power to repair the damage and make responsible families whole.” The president said his plan would make it easier for homeowners to refinance their mortgages into current low interest rates, which are now below 4 percent. Borrowers, even those who owe more than their homes are worth, would be able to refinance into loans guaranteed by the Federal Housing Administration.
Construction Spending in U.S. Climbs Most in Four Months in Stability Sign (Source: Bloomberg)
Construction spending in the U.S. rose in December at the fastest pace in four months, reflecting broad- based gains that signal the industry is stabilizing. Building outlays increased 1.5 percent, the biggest gain since August, Commerce Department figures showed today in Washington. The median estimate of 51 economists in a Bloomberg survey called for a 0.5 percent rise. A housing market that is gaining some steam as builders begin apartment projects may breathe life into the industry that’s struggled since triggering the recession in 2007. At the same time, decreased spending by the government may temper progress in construction as a whole.
Dollar Falls for Second Day Versus Euro on Stocks Rally, Before Jobs Data (Source: Bloomberg)
The dollar fell against the euro the euro for a second day as Asian stocks extended a global rally, damping demand for haven currencies. The yen maintained a decline from yesterday versus the 17- nation currency before U.S. data that economists said will show fewer Americans filed for jobless benefits, adding to evidence that the world’s largest economy is picking up. A gauge of volatility for the yen climbed to the highest this year amid speculation Japan’s government will intervene in the foreign- exchange market. “Risk appetite is fairly positive at the moment, and this could continue for a couple of weeks,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency-risk management company. “Typical safe-haven currencies have taken a step back now,” he said, referring to the dollar and yen.
Facebook Files to Raise $5B in Biggest Internet IPO (Source: Bloomberg)
Facebook Inc. (FB), the social-networking website that in eight years changed the way the world communicates, filed to raise $5 billion in the largest Internet initial public offering on record. Facebook, whose meteoric rise spawned an Oscar-winning film and captivated Wall Street, today named Morgan Stanley as the lead underwriter on the IPO, while reporting a 24-fold increase in sales over the past four years to $3.71 billion in 2011. The planned IPO dwarfs Google Inc. (GOOG)’s 2004 offering and tests whether social-networking providers deserve valuations that surpass such established companies as International Business Machines Corp. (IBM) and Procter & Gamble Co. The Menlo Park, California-based company is considering a valuation of $75 billion to $100 billion, two people with knowledge of the matter said last week.
China’s Manufacturing Industry Holds Up Against Global Slowdown: Economy (Source: Bloomberg)
Chinese manufacturing indexes rose in January as the world’s second-biggest economy withstood weaker exports driven by Europe’s debt crisis and a government-induced property slowdown. The official purchasing managers’ index increased to 50.5 from 50.3 in December, exceeding the median estimate in a Bloomberg News survey for a reading below the 50 level that divides expansion from contraction. The data may have been distorted by a weeklong holiday. A separate gauge from HSBC Holdings Plc and Markit Economics rose to 48.8. India’s manufacturing grew at the fastest pace in eight months. Premier Wen Jiabao yesterday reiterated his government will “fine-tune” economic policies as needed after the central bank held off on a reduction in bank-reserve requirements that some analysts had forecast for January.
Indexes for export orders, imports and employment in the official PMI showed a deeper decline, underscoring an International Monetary Fund warning last week that the euro area’s crisis could trigger another global recession.
Hong Kong Homes Face 25% Drop in Year of the Dragon: Mortgages (Source: Bloomberg)
The Year of the Dragon, representing wealth and power in China, is shaping up to be the opposite for the world’s costliest housing market, Hong Kong. Mortgages (HKMGLEND) that need to be insured by the government because of risk experienced the steepest plunge in six years in 2011, a sign the biggest home price decline since the global credit crisis is accelerating. Property prices that have slid 6 percent since June may fall as much as 25 percent by 2013, estimates Andrew Lawrence of Barclays Capital, who predicted the initial slide in April. Asian real estate markets from Singapore to Beijing to Mumbai are stalling or have started declining as governments seek to curb the type of housing bubble that brought down the U.S. economy. In Hong Kong, rising borrowing costs, extra transaction taxes and higher down-payment requirements imposed by the government have fueled the slump.
ECB Plan for Loans as Collateral Said to Be Avoided by Some Euro Members (Source: Bloomberg)
The European Central Bank’s plan to accept more bank loans as collateral may not be used by all euro-region nations, threatening to fragment the rules applying to bank funding operations, said two euro-area officials with knowledge of the discussions. The initiative is likely to be implemented on a voluntary basis by national central banks and several of them may opt out, said the officials, who declined to be identified because the information is confidential. Germany’s Bundesbank has indicated it may be among those to shun the measure, arguing the country’s banks don’t need to borrow more from the ECB. An ECB spokesman declined to comment. “It contradicts the idea that all banks are treated equally in the euro area,” said Klaus Baader, co-head of economic research at Societe Generale SA in London. “It creates a two-class society. Central banks that take part are therefore identifying themselves as ones that are dealing with a weak banking system.”
Manufacturing Output in U.K. Unexpectedly Returns to Growth After Declines (Source: Bloomberg)
A U.K. manufacturing index jumped to an eight-month high in January and unexpectedly returned to growth after a quarter of contraction as production rebounded. The factory gauge, based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply, rose to 52.1 from a revised 49.7 in December, Markit said in a report on its website today. The median forecast of 28 economists in a Bloomberg News survey was for a reading of 50, the level that divides expansion from contraction. Separate reports today showed manufacturing indexes for Europe, China and India also rose in January. Still, the debt crisis in the euro area, the U.K.’s biggest export market, has dimmed the outlook for manufacturers, and Bank of England Governor Mervyn King said last week that policy makers can increase stimulus again if needed to aid the economy.
Spain Said to Plan to Buy CoCo Bonds From Banks as Part of Industry Revamp (Source: Bloomberg)
Spain will offer to inject funds into lenders that agree to merge as part of the government’s plan to overhaul the industry and shepherd weaker banks into tie-ups, said a person familiar with the process. The state will buy contingent convertible bonds, or CoCos, which convert to equity when banks’ capital ratio slips below a certain level, yielding 8 percent, said the person, who declined to be named because the plan hasn’t been made public. Spain, which pays about 5 percent to borrow for 10 years, will issue debt to buy the securities, even though the plan will have no impact on the budget deficit, the person said. Lenders that agree to merge will also have longer to apply new provisioning rules that the government will announce on Feb. 3 as part of the overhaul, the person said.
Fernandez Curbing Imports Leaves Argentines Searching in Vain for Fridges (Source: Bloomberg)
Retiree Teresa Teffer searched branches of Argentina’s leading appliance retailers for a fridge and oven she’d seen on display less than two months earlier. She gave up after finding neither. “They have nothing to offer me,” the 71-year-old said as she left an SACI Falabella (FALAB) store in Buenos Aires’s Alto Avellaneda shopping mall. “There are only a couple of lesser- known brands. The government is forcing me to buy what it wants and not what I want.” Consumers face fewer choices in everything from blenders to computer parts as President Cristina Fernandez de Kirchner curbs imports to shore up a dwindling trade surplus and protect manufacturers whose competitiveness is suffering from a peso that’s not weakening fast enough to offset inflation. The restrictions forced automaker Fiat SpA (F)’s local unit to suspend production this month and prompted Brazil’s Trade Minister Fernando Pimentel to say that neighboring Argentina is a “permanent problem.”
20120202 1018 Global Commodities Related News.
Corn (Source CME)
US corn futures ended higher, buoyed by spillover support from wheat futures. Corn was also buoyed by broader based buying associated with weakness in the U.S. dollar, analysts say. Uncertainty surrounding the amount of damage South American crops incurred from hot, dry conditions are keeping prices underpinned with firm cash prices aiding the positive theme as well, analyst add. CBOT March corn ended up 3c at $6.42/bushel.
Wheat (Source CME)
US wheat futures ended higher, rallying to an over 4 month high for the second consecutive day on worries about freeze damage to European wheat and Russia curbing exports. Investors continued to favor buying wheat, as the uncertainty about lost production from winterkill in the Black Sea region and Europe as well the potential increased export demand from reduced Russian exports sparked buying, analyst say. Added support was drawn from weakness in the U.S. dollar, a feature generating broader based commodity gains. CBOT March wheat ended up 8 1/4c to $6.74 1/4/bushel, March KCBT wheat ended up 7c at $7.22 1/2, and March MGEX wheat ended up 9c at $8.36 3/4.
Rice (Source CME)
US rice futures tumbled for the second straight day, succumbing to speculative selling. The market is under pressure from lagging export demand, with chart based selling accelerating losses once futures dipped below recent lows, analysts say CBOT March rice ended down 26c at $13.74/hundredweight.
GRAINS-U.S. wheat at 4-1/2 month top on Russia export worries
NEW DELHI, Feb 1 (Reuters) - U.S. wheat climbed to a four-and-half month top rising for a second straight session on expectations that Russia, the world's third-largest supplier, was likely to curb exports.
"Prices have gone up because Russia has said that there could be restrictions on wheat exports," said Lynette Tan, analyst with Phillip Futures in Singapore.
Russia govt to determine grain export cap Feb 2
MOSCOW/TAMBOV, Russia, Jan 31 (Reuters) - Russia's government will determine on Thursday how much grain can be exported during this crop year before it considers imposing a protective duty to keep grain in the country, Deputy Prime Minister Viktor Zubkov told Reuters.
"The day after tomorrow I will hold a meeting. We will decide and I will give some signals," Zubkov said in response to a question about the level of export which could trigger the duty.
Mexico lowers corn harvest forecast due to drought
MEXICO CITY, Jan 31 (Reuters) - Mexico's corn harvest will likely be smaller than expected this year, after coming in below expectations last year, due to a devastating drought, Agriculture Minister Francisco Mayorga said on Tuesday.
The corn harvest is now expected to total 20 million tonnes of white corn and 1.8 million tonnes of yellow corn in 2012, compared with the 25 million tonnes estimated before the effects of the dry weather were fully known.
Tight Farmer Holding Pushes Cash Corn Basis (Source CME)
Farmer sales of U.S. corn are not keeping up with relative needs of the spot market, pushing basis levels to record levels for this time of year. Strong prices for corn futures are not loosening the tight grip farmers have on their stored supplies, as they remain reluctant sellers of inventories. "The spot cash market for corn is artificially tight, as we know there is plenty of corn out there in the middle of the marketing year in January," said Darrel Good, agricultural economist at the University of Illinois. Farmers believe the big break in price since August has left corn undervalued, and with a decent price available for storing corn, farmers are not motivated sellers at this point, Good said. Only a trickle is coming out of on-farm storage bins keeping available nearby supplies tight as farmers are optimistic prices have further to rise. Farmers are also disappointed with cash prices not improving since the harvest.
The average cash price for corn from Sept. 1 to the end of November in St. Louis was $6.61 1/4 a bushel. Current St. Louis prices are trading near $6.60, still cheaper than the average bid at harvest. "Farmers not pressed for cash are not inspired to sell at a price below what they passed up in the fall," said Dave Marshall, an independent marketing advisor for farmers in southern Illinois. Most producers have plenty of cash from lucrative sales last fall and during the early winter, so there is generally no urgent need for cash flow at this point. With the low interest returns available from bank deposits, its a better investment for farmers to hold onto supplies, said Kim Craig, a merchandiser for Bell Enterprises, a privately owned group of grain elevators in Illinois.
Indonesia To Review India Rice Contracts On Delivery Delay (Source CME)
Indonesia will review contracts with Indian rice exporters who are seeking more time to deliver cargoes citing congestion at ports and bottlenecks in procuring grain from millers, trading executives and a Jakarta-based official said. "We will be reviewing the delivery schedule for cargoes from India, to decide whether any additional time needs to be given or impose a penalty for delayed shipments," state-run procurement agency Bulog's chief executive Sutarto Alimoeso told Dow Jones Newswires. Indonesia, which was the top importer in 2011, traditionally buys from Thailand and Vietnam. For the first time in several years, Bulog locked in a deal for 250,000 metric tons of Indian rice on Nov. 15 for delivery by mid-February. However, with two weeks to go, less than 100,000 tons have been shipped out and around 31,000 tons delivered, according to estimates of traders, port officials and cargo surveyors. Another 36,700 tons are being loaded and ships for loading 35,000 tons are waiting for berth at Indian ports.
"Due to infrastructural bottlenecks, we have sought two more weeks to complete deliveries," said Prem Garg, managing director of Shri Lal Mahal Ltd., which has a 100,000-ton contract with Bulog. Indonesia has also bought 100,000 tons from Amira Foods and 50,000 tons from Emmsons International. "Apart from a small cargo of 5,000 tons, all our orders from Bulog have been shipped out or are under loading and will be completed soon," an Emmsons executive said. An executive at Amira Foods didn't give details of shipments but Bulog officials said they haven't received any cargo from the company and only a ship with 6,000 tons is on high seas. Many Indonesian ports are difficult to access and arrangements had to be made for smaller vessels to deliver cargoes to Bulog, an Indian trading executive involved in the deals said. He added that Indian millers have also hiked the prices of 15% brokens due to the large Indonesian order.
Alimoeso said the government had given Bulog licenses to complete all imports by end-February and the agency had asked Indian exporters to deliver shipments by Feb. 15. Some shipments from Thailand are also pending but they will likely be completed this month, he said. Bulog has signed a memorandum of understanding with Myanmar Rice Industry Association to import up to 200,000 tons annually, if needed. Alimoeso said so far there are no plans to offset delay in deliveries from India by buying Myanmarese rice.
Indonesia's Sulawesi Jan cocoa bean exports fall -industry
JAKARTA, Feb 1 (Reuters) - Indonesia's cocoa bean exports from its main growing island of Sulawesi slipped 23 percent in January from the same month a year ago, and was down 26 percent from the previous month, industry data showed on Wednesday.
Sulawesi cocoa exports were at 8,904.25 tonnes in January from 11,634.66 tonnes a year ago, data from the Indonesia Cocoa Association showed. December exports were at 12,051.72 tonnes.
India coffee exports fall 7.5 pct in Oct-Jan
MUMBAI, Feb 1 (Reuters) - Coffee exports from India fell 7.5 percent to 79,021 tonnes in October-January on lower stocks and rising local demand. Arrivals from the new crop in coming months are expected to stem the fall, though.
In value terms, the exports rose to $243.05 million from $218.91 million a year ago, the Coffee Board said in a statement.
India releases 1.4 mln T sugar for Feb-sources
MUMBAI, Feb 1 (Reuters) - India has allowed millers to sell 1.4 million tonnes of sugar in the open market in February, 100,000 tonnes less than in January, government and industry sources said on Wednesday.
The government sets the quantity of sugar that millers can sell each month to control sharp swings in prices and ensure adequate supplies for the country's 1.2 billion people.
Global rubber output seen up 3.2 pct in 2012 -ANRPC
SINGAPORE, Feb 1 (Reuters) - Global natural rubber output is forecast to rise 3.2 percent in 2012 because of higher production in Vietnam, the Association of Natural Rubber Producing Countries (ANRPC) said on Wednesday.
The ANRPC pegged 2012 production at 10.450 million tonnes, up from 10.127 million tonnes last year and slightly higher than an earlier estimate of 10.415 million tonnes.
Exporters say boycott landmark I.Coast cocoa auction
ABIDJAN, Jan 31 (Reuters) - Ivory Coast's reform of its cocoa sector, vital for the country to obtain further debt relief, began in confusion on Tuesday as the regulator hailed the first two forward-sales auctions as a success while exporters said they had boycotted them.
Ivory Coast held as scheduled two auctions of the 2012-13 crop which is the first step in a move by the top grower away from a decade of liberalisation back to a price-regulated sector aimed at guaranteeing its farmers a price floor.
Al Khaleej Dubai refinery buys Indian sugar
LONDON, Jan 31 (Reuters) - The Dubai Al Khaleej sugar refinery, typically supplied by raw sugar from top producer Brazil, has recently bought more than 100,000 tonnes of Indian sugar, general manager Cyrus Raja said on Tuesday.
"The Indian raw sugar is refined and sold to the regular customers of Al Khaleej Sugar in the Middle East and North Africa region and other parts of the world," Raja told Reuters in an emailed interview before the Feb. 4-7 Kingsman Dubai sugar conference.
Brent rises above $111, Iran supply worries support
SINGAPORE, Feb 1 (Reuters) - Brent crude rose above $111 a barrel, gaining for a second straight session on fears that tensions between Iran and the West may escalate with U.S. lawmakers mulling more sanctions on Tehran, while promising China data also supported sentiment.
"There's the positive factor of supply worries from Iran and South Sudan while on the other side, we have a bearish factor from a weaker economy in Europe that will reduce oil demand," Ken Hasegawa, a commodity sales manager at Newedge Japan, said.
Oil Futures Decline a Fifth Day as U.S. Stockpiles Rise, Fuel Demand Slips (Source: Bloomberg)
Oil declined for a fifth day in New York, matching the longest losing streak since August, as U.S. crude stockpiles increased more-than-estimated and gasoline consumption fell to a 10-year low. Futures were down as much as 0.6 percent after settling yesterday at the lowest close in six weeks. Crude supplies rose by 4.2 million barrels last week, figures from the Energy Department showed. They were projected to increase 2.6 million barrels, according to a Bloomberg News survey. Oil rose earlier yesterday after manufacturing indexes from Germany to the U.S. increased. “It appears to be driven by U.S. domestic factors, the larger-than-expected increase in crude stockpiles and fall in gasoline demand,” said Ric Spooner, chief analyst at CMC Markets in Sydney. “In the short-term, it flies in the face of the run of reasonably positive data from the U.S.”
Indonesian Bourse Starts Trading Physical Tin Contract in Challenge to LME (Source: Bloomberg)
An exchange in Indonesia, the world’s largest tin exporter, started trading a physical contract today to create an alternative to the benchmark on the London Metal Exchange after twice delaying the initiative. The Indonesia Commodity & Derivatives Exchange, which offers palm oil and gold, had two lots of 5 metric tons each traded before the contract settled at $24,500 a ton. The introduction was delayed from Dec. 15 and Jan. 12 to allow potential users more time to prepare. Tin rallied 27 percent last month, the biggest gain since at least July 1989, as stockpiles fell. Indonesia represents about 40 percent of global exports, and the move to set up the new benchmark was supported by the government through the Commodity Futures Trading Regulatory Agency and PT Timah (TINS), the country’s biggest producer. At present, the LME, the world’s largest metals bourse, offers cash and futures trading in tin.
Steel Demand Slowing With Europe in Setback to ArcelorMittal: Commodities (Source: Bloomberg)
Steel demand worldwide is growing slower than forecast, eroding profit at producers including ArcelorMittal and Tata Steel Ltd. (TATA) and forcing investors to revise their 2012 outlook for the $430 billion industry. Global use of the alloy will rise 4.5 percent this year, less than the 5.4 percent forecast in October by the World Steel Association, according to the median estimate of 14 steelmakers, analysts and traders surveyed by Bloomberg. Growth may be as low as 1.2 percent, according to Bloomberg Industries analysts. The gain, the lowest in three years, is tempered by cooling economies in China and Europe, where orders for steel products for houses, cars and machinery are stagnating and will keep the alloy’s prices and overseas shipments muted, analysts said.
Iron Ore-Spot prices respond to China demand signals
BEIJING, Feb 1 (Reuters) - Chinese spot iron ore prices rose on Wednesday as traders drifted back to the market following the new year break amid signs that demand could start to pick up in the coming weeks.
Industry consultancy Umetal said Pilbara fines with 61.5 percent iron content were being offered at $141-143 per tonne cost and freight on Wednesday, up $2 from Tuesday.
US Steel offers improved outlook for 1st quarter
Jan 31 (Reuters) - U.S. Steel Corp posted a wider-than-expected quarterly loss on Tuesday but said it expects a better first quarter as it sold off its money-losing Serbian operations, European prices appear to have bottomed-out and end-user demand is ticking up.
The positive outlook in an industry that has been struggling to rebound from the recession sent the steelmaker's stock up nearly 5 percent to $30.19 on the New York Stock Exchange.
Gold Climbs to Eight-Week High as Dollar Drop, Europe Debt Fueling Demand (Source: Bloomberg)
Gold futures in New York climbed to the highest price in almost eight weeks as Europe’s lingering debt crisis and a weaker dollar spurred demand for the precious metal as an alternative asset. The dollar fell as much as 0.8 percent against a basket of six currencies. Gold jumped 11 percent last month, the biggest January gain since 1983, on mounting concern that Europe’s debt woes may lead to a recession, and after the Federal Reserve pledged to keep its benchmark U.S. interest rate low until at least late 2014 to spur growth. “Gold is trading like a hard currency,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. “People are worried about currency debasement because of the credit easing by several countries.”
METALS-Copper steady, supported by firmer China PMI
SHANGHAI, Feb 1 (Reuters) - London copper traded steady on Wednesday, underpinned by Chinese data that reinforced Beijing's commitment to economic growth, but gains were capped ahead of data expected to show European and U.S. economies got off to a slow start in 2012.
Two separate surveys of Chinese manufacturing activity showed stuttering growth in the world's second largest economy. A government survey indicated a slight upturn in production in January, but a private sector report suggested factory activity shrank for a third month.
PRECIOUS-Gold steady; U.S., Europe data eyed
SINGAPORE, Feb 1 (Reuters) - Gold was steady on Wednesday after ending January with its biggest monthly rise since August, while investors eyed more data from the world's key economies for trading cues after China released a better-than-expected manufacturing survey number.
China's official Purchasing Managers' Index showed the manufacturing sector expanded modestly in January, with the index reading inching up to 50.5 from 50.3 in December, above a 49.5 reading forecast.
Global Shipping Prices Face More Choppy Waters (Source CME)
Times are tough for the shipping market. Freight rates hit a record low on weak demand for iron ore, poor weather conditions in mining regions and a glut of shipping capacity. The Baltic Dry Index, a composite of commodity shipping costs around the world, fell for a 32nd consecutive session to 662. The previous low, of 663, came in December 2008, during the depths of the credit crunch. But unlike the one three years ago, this slump reflects more than a sluggish global economy. A conflation of seasonal, environmental and demand-side factors accelerated the index's decline in recent months and could tip it further into the red. The index has plunged 59% this year alone and is down 94% from the peak reached just before the crisis hit. More than anything, this collapse "is due to excessive supply of ships and shipping capacity," said Beethowen Nepomuceno, who is responsible for ocean transport at commodities-trading company Cargill Inc.'s Sao Paulo's office.
Analysts and industry players expect the glut in shipping capacity to last for several years given that vessels often operate for around 25 years. But increased scrapping and the possibility that unprofitable shipping firms could be forced out of business should eventually lend some stability to prices, they said. "If old ships exit, that could start to correct the market," Nepomuceno said. "It's an eternal game of push and shove." A big factor depressing rates is the delivery of vessels ordered when the global economy was booming in the early-to-mid-2000s and credit was freely flowing, said Mark Williams, research manager at global shipbroking firm Braemar Seascope. "Companies saw China as a never-ending story and wanted to invest their profits in new shipping capacity," he said. Now those vessels are being delivered, yet the need for all of them is no longer as obvious. The order book currently stretches to 2015, according to industry analysts, with the majority of vessels due for delivery this year.
Other, more-recent factors have aggravated the situation. Unusually heavy rains in Brazil prompted mining giant Vale SA (VALE, VALE5.BR), which produces around 25% of the world's iron ore, to invoke a clause known as "force majeure" on Jan. 11 in some contracts to free itself from penalties on delayed shipments of ore, which is primarily used to make steel. That was lifted on Jan. 23, and mining and transportation resumed. In addition, demand for iron ore in China, which consumes more than half the world's iron-ore output, has been waning in recent months; inventories at Chinese ports are near record levels. China's crude-steel output climbed 8.9% in 2011 to 695.5 million metric tons, but growth should slow to 5% this year as Beijing's efforts to cool the economy continue to bite, according to market estimates compiled by London-based The Steel Index. In addition, the Lunar New Year holiday, which essentially shut down the country for a week in January, was a temporary brake on demand.
"The shipping market has been hit by a triple whammy of bad weather, weaker Chinese iron-ore demand and public holidays," Williams of Braemar Seascope said. A longer-lasting source of pressure is Vale's order for a fleet of 35 so-called Valemax vessels that can carry 400,000 deadweight tons, making them more than twice as large as Capesizes, the next-largest carrier, which typically carry up to 180,000 deadweight tons. The super-sized ships will be used on the company's Brazil-Asia route to compete more efficiently with nearer Australia shippers. Vale docked the first of the fleet, the Berge Everest, at China's Port of Dalian in late December, with a delivery of 350,000 tons of iron ore. China's shipping industry has lobbied against such ships, fearing they may strengthen Vale's dominance on the dry bulk market and China's Ministry of Transport has restricted access of the vessels into its ports.
"The vessels have been built, so the tonnage will be there," said an analyst at a shipping firm who declined to be named. "It's going to be a tough couple of years for the shipping market."
China ministry says to bar giant ships from ports
SHANGHAI, Jan 31 (Reuters) - China will no longer allow large ships exceeding approved capacities to dock at its ports, the Ministry of Transport said, effectively snuffing Brazilian miner Vale SA's hopes of sending its mega-ships to China.
Ships exceeding approved capacities were previously assessed on a case-by-case basis, but the ministry said in a statement on its website on Tuesday that giant dry bulk vessels and oil tankers were prohibited with immediate effect.
US corn futures ended higher, buoyed by spillover support from wheat futures. Corn was also buoyed by broader based buying associated with weakness in the U.S. dollar, analysts say. Uncertainty surrounding the amount of damage South American crops incurred from hot, dry conditions are keeping prices underpinned with firm cash prices aiding the positive theme as well, analyst add. CBOT March corn ended up 3c at $6.42/bushel.
Wheat (Source CME)
US wheat futures ended higher, rallying to an over 4 month high for the second consecutive day on worries about freeze damage to European wheat and Russia curbing exports. Investors continued to favor buying wheat, as the uncertainty about lost production from winterkill in the Black Sea region and Europe as well the potential increased export demand from reduced Russian exports sparked buying, analyst say. Added support was drawn from weakness in the U.S. dollar, a feature generating broader based commodity gains. CBOT March wheat ended up 8 1/4c to $6.74 1/4/bushel, March KCBT wheat ended up 7c at $7.22 1/2, and March MGEX wheat ended up 9c at $8.36 3/4.
Rice (Source CME)
US rice futures tumbled for the second straight day, succumbing to speculative selling. The market is under pressure from lagging export demand, with chart based selling accelerating losses once futures dipped below recent lows, analysts say CBOT March rice ended down 26c at $13.74/hundredweight.
GRAINS-U.S. wheat at 4-1/2 month top on Russia export worries
NEW DELHI, Feb 1 (Reuters) - U.S. wheat climbed to a four-and-half month top rising for a second straight session on expectations that Russia, the world's third-largest supplier, was likely to curb exports.
"Prices have gone up because Russia has said that there could be restrictions on wheat exports," said Lynette Tan, analyst with Phillip Futures in Singapore.
Russia govt to determine grain export cap Feb 2
MOSCOW/TAMBOV, Russia, Jan 31 (Reuters) - Russia's government will determine on Thursday how much grain can be exported during this crop year before it considers imposing a protective duty to keep grain in the country, Deputy Prime Minister Viktor Zubkov told Reuters.
"The day after tomorrow I will hold a meeting. We will decide and I will give some signals," Zubkov said in response to a question about the level of export which could trigger the duty.
Mexico lowers corn harvest forecast due to drought
MEXICO CITY, Jan 31 (Reuters) - Mexico's corn harvest will likely be smaller than expected this year, after coming in below expectations last year, due to a devastating drought, Agriculture Minister Francisco Mayorga said on Tuesday.
The corn harvest is now expected to total 20 million tonnes of white corn and 1.8 million tonnes of yellow corn in 2012, compared with the 25 million tonnes estimated before the effects of the dry weather were fully known.
Tight Farmer Holding Pushes Cash Corn Basis (Source CME)
Farmer sales of U.S. corn are not keeping up with relative needs of the spot market, pushing basis levels to record levels for this time of year. Strong prices for corn futures are not loosening the tight grip farmers have on their stored supplies, as they remain reluctant sellers of inventories. "The spot cash market for corn is artificially tight, as we know there is plenty of corn out there in the middle of the marketing year in January," said Darrel Good, agricultural economist at the University of Illinois. Farmers believe the big break in price since August has left corn undervalued, and with a decent price available for storing corn, farmers are not motivated sellers at this point, Good said. Only a trickle is coming out of on-farm storage bins keeping available nearby supplies tight as farmers are optimistic prices have further to rise. Farmers are also disappointed with cash prices not improving since the harvest.
The average cash price for corn from Sept. 1 to the end of November in St. Louis was $6.61 1/4 a bushel. Current St. Louis prices are trading near $6.60, still cheaper than the average bid at harvest. "Farmers not pressed for cash are not inspired to sell at a price below what they passed up in the fall," said Dave Marshall, an independent marketing advisor for farmers in southern Illinois. Most producers have plenty of cash from lucrative sales last fall and during the early winter, so there is generally no urgent need for cash flow at this point. With the low interest returns available from bank deposits, its a better investment for farmers to hold onto supplies, said Kim Craig, a merchandiser for Bell Enterprises, a privately owned group of grain elevators in Illinois.
Indonesia To Review India Rice Contracts On Delivery Delay (Source CME)
Indonesia will review contracts with Indian rice exporters who are seeking more time to deliver cargoes citing congestion at ports and bottlenecks in procuring grain from millers, trading executives and a Jakarta-based official said. "We will be reviewing the delivery schedule for cargoes from India, to decide whether any additional time needs to be given or impose a penalty for delayed shipments," state-run procurement agency Bulog's chief executive Sutarto Alimoeso told Dow Jones Newswires. Indonesia, which was the top importer in 2011, traditionally buys from Thailand and Vietnam. For the first time in several years, Bulog locked in a deal for 250,000 metric tons of Indian rice on Nov. 15 for delivery by mid-February. However, with two weeks to go, less than 100,000 tons have been shipped out and around 31,000 tons delivered, according to estimates of traders, port officials and cargo surveyors. Another 36,700 tons are being loaded and ships for loading 35,000 tons are waiting for berth at Indian ports.
"Due to infrastructural bottlenecks, we have sought two more weeks to complete deliveries," said Prem Garg, managing director of Shri Lal Mahal Ltd., which has a 100,000-ton contract with Bulog. Indonesia has also bought 100,000 tons from Amira Foods and 50,000 tons from Emmsons International. "Apart from a small cargo of 5,000 tons, all our orders from Bulog have been shipped out or are under loading and will be completed soon," an Emmsons executive said. An executive at Amira Foods didn't give details of shipments but Bulog officials said they haven't received any cargo from the company and only a ship with 6,000 tons is on high seas. Many Indonesian ports are difficult to access and arrangements had to be made for smaller vessels to deliver cargoes to Bulog, an Indian trading executive involved in the deals said. He added that Indian millers have also hiked the prices of 15% brokens due to the large Indonesian order.
Alimoeso said the government had given Bulog licenses to complete all imports by end-February and the agency had asked Indian exporters to deliver shipments by Feb. 15. Some shipments from Thailand are also pending but they will likely be completed this month, he said. Bulog has signed a memorandum of understanding with Myanmar Rice Industry Association to import up to 200,000 tons annually, if needed. Alimoeso said so far there are no plans to offset delay in deliveries from India by buying Myanmarese rice.
Indonesia's Sulawesi Jan cocoa bean exports fall -industry
JAKARTA, Feb 1 (Reuters) - Indonesia's cocoa bean exports from its main growing island of Sulawesi slipped 23 percent in January from the same month a year ago, and was down 26 percent from the previous month, industry data showed on Wednesday.
Sulawesi cocoa exports were at 8,904.25 tonnes in January from 11,634.66 tonnes a year ago, data from the Indonesia Cocoa Association showed. December exports were at 12,051.72 tonnes.
India coffee exports fall 7.5 pct in Oct-Jan
MUMBAI, Feb 1 (Reuters) - Coffee exports from India fell 7.5 percent to 79,021 tonnes in October-January on lower stocks and rising local demand. Arrivals from the new crop in coming months are expected to stem the fall, though.
In value terms, the exports rose to $243.05 million from $218.91 million a year ago, the Coffee Board said in a statement.
India releases 1.4 mln T sugar for Feb-sources
MUMBAI, Feb 1 (Reuters) - India has allowed millers to sell 1.4 million tonnes of sugar in the open market in February, 100,000 tonnes less than in January, government and industry sources said on Wednesday.
The government sets the quantity of sugar that millers can sell each month to control sharp swings in prices and ensure adequate supplies for the country's 1.2 billion people.
Global rubber output seen up 3.2 pct in 2012 -ANRPC
SINGAPORE, Feb 1 (Reuters) - Global natural rubber output is forecast to rise 3.2 percent in 2012 because of higher production in Vietnam, the Association of Natural Rubber Producing Countries (ANRPC) said on Wednesday.
The ANRPC pegged 2012 production at 10.450 million tonnes, up from 10.127 million tonnes last year and slightly higher than an earlier estimate of 10.415 million tonnes.
Exporters say boycott landmark I.Coast cocoa auction
ABIDJAN, Jan 31 (Reuters) - Ivory Coast's reform of its cocoa sector, vital for the country to obtain further debt relief, began in confusion on Tuesday as the regulator hailed the first two forward-sales auctions as a success while exporters said they had boycotted them.
Ivory Coast held as scheduled two auctions of the 2012-13 crop which is the first step in a move by the top grower away from a decade of liberalisation back to a price-regulated sector aimed at guaranteeing its farmers a price floor.
Al Khaleej Dubai refinery buys Indian sugar
LONDON, Jan 31 (Reuters) - The Dubai Al Khaleej sugar refinery, typically supplied by raw sugar from top producer Brazil, has recently bought more than 100,000 tonnes of Indian sugar, general manager Cyrus Raja said on Tuesday.
"The Indian raw sugar is refined and sold to the regular customers of Al Khaleej Sugar in the Middle East and North Africa region and other parts of the world," Raja told Reuters in an emailed interview before the Feb. 4-7 Kingsman Dubai sugar conference.
Brent rises above $111, Iran supply worries support
SINGAPORE, Feb 1 (Reuters) - Brent crude rose above $111 a barrel, gaining for a second straight session on fears that tensions between Iran and the West may escalate with U.S. lawmakers mulling more sanctions on Tehran, while promising China data also supported sentiment.
"There's the positive factor of supply worries from Iran and South Sudan while on the other side, we have a bearish factor from a weaker economy in Europe that will reduce oil demand," Ken Hasegawa, a commodity sales manager at Newedge Japan, said.
Oil Futures Decline a Fifth Day as U.S. Stockpiles Rise, Fuel Demand Slips (Source: Bloomberg)
Oil declined for a fifth day in New York, matching the longest losing streak since August, as U.S. crude stockpiles increased more-than-estimated and gasoline consumption fell to a 10-year low. Futures were down as much as 0.6 percent after settling yesterday at the lowest close in six weeks. Crude supplies rose by 4.2 million barrels last week, figures from the Energy Department showed. They were projected to increase 2.6 million barrels, according to a Bloomberg News survey. Oil rose earlier yesterday after manufacturing indexes from Germany to the U.S. increased. “It appears to be driven by U.S. domestic factors, the larger-than-expected increase in crude stockpiles and fall in gasoline demand,” said Ric Spooner, chief analyst at CMC Markets in Sydney. “In the short-term, it flies in the face of the run of reasonably positive data from the U.S.”
Indonesian Bourse Starts Trading Physical Tin Contract in Challenge to LME (Source: Bloomberg)
An exchange in Indonesia, the world’s largest tin exporter, started trading a physical contract today to create an alternative to the benchmark on the London Metal Exchange after twice delaying the initiative. The Indonesia Commodity & Derivatives Exchange, which offers palm oil and gold, had two lots of 5 metric tons each traded before the contract settled at $24,500 a ton. The introduction was delayed from Dec. 15 and Jan. 12 to allow potential users more time to prepare. Tin rallied 27 percent last month, the biggest gain since at least July 1989, as stockpiles fell. Indonesia represents about 40 percent of global exports, and the move to set up the new benchmark was supported by the government through the Commodity Futures Trading Regulatory Agency and PT Timah (TINS), the country’s biggest producer. At present, the LME, the world’s largest metals bourse, offers cash and futures trading in tin.
Steel Demand Slowing With Europe in Setback to ArcelorMittal: Commodities (Source: Bloomberg)
Steel demand worldwide is growing slower than forecast, eroding profit at producers including ArcelorMittal and Tata Steel Ltd. (TATA) and forcing investors to revise their 2012 outlook for the $430 billion industry. Global use of the alloy will rise 4.5 percent this year, less than the 5.4 percent forecast in October by the World Steel Association, according to the median estimate of 14 steelmakers, analysts and traders surveyed by Bloomberg. Growth may be as low as 1.2 percent, according to Bloomberg Industries analysts. The gain, the lowest in three years, is tempered by cooling economies in China and Europe, where orders for steel products for houses, cars and machinery are stagnating and will keep the alloy’s prices and overseas shipments muted, analysts said.
Iron Ore-Spot prices respond to China demand signals
BEIJING, Feb 1 (Reuters) - Chinese spot iron ore prices rose on Wednesday as traders drifted back to the market following the new year break amid signs that demand could start to pick up in the coming weeks.
Industry consultancy Umetal said Pilbara fines with 61.5 percent iron content were being offered at $141-143 per tonne cost and freight on Wednesday, up $2 from Tuesday.
US Steel offers improved outlook for 1st quarter
Jan 31 (Reuters) - U.S. Steel Corp posted a wider-than-expected quarterly loss on Tuesday but said it expects a better first quarter as it sold off its money-losing Serbian operations, European prices appear to have bottomed-out and end-user demand is ticking up.
The positive outlook in an industry that has been struggling to rebound from the recession sent the steelmaker's stock up nearly 5 percent to $30.19 on the New York Stock Exchange.
Gold Climbs to Eight-Week High as Dollar Drop, Europe Debt Fueling Demand (Source: Bloomberg)
Gold futures in New York climbed to the highest price in almost eight weeks as Europe’s lingering debt crisis and a weaker dollar spurred demand for the precious metal as an alternative asset. The dollar fell as much as 0.8 percent against a basket of six currencies. Gold jumped 11 percent last month, the biggest January gain since 1983, on mounting concern that Europe’s debt woes may lead to a recession, and after the Federal Reserve pledged to keep its benchmark U.S. interest rate low until at least late 2014 to spur growth. “Gold is trading like a hard currency,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. “People are worried about currency debasement because of the credit easing by several countries.”
METALS-Copper steady, supported by firmer China PMI
SHANGHAI, Feb 1 (Reuters) - London copper traded steady on Wednesday, underpinned by Chinese data that reinforced Beijing's commitment to economic growth, but gains were capped ahead of data expected to show European and U.S. economies got off to a slow start in 2012.
Two separate surveys of Chinese manufacturing activity showed stuttering growth in the world's second largest economy. A government survey indicated a slight upturn in production in January, but a private sector report suggested factory activity shrank for a third month.
PRECIOUS-Gold steady; U.S., Europe data eyed
SINGAPORE, Feb 1 (Reuters) - Gold was steady on Wednesday after ending January with its biggest monthly rise since August, while investors eyed more data from the world's key economies for trading cues after China released a better-than-expected manufacturing survey number.
China's official Purchasing Managers' Index showed the manufacturing sector expanded modestly in January, with the index reading inching up to 50.5 from 50.3 in December, above a 49.5 reading forecast.
Global Shipping Prices Face More Choppy Waters (Source CME)
Times are tough for the shipping market. Freight rates hit a record low on weak demand for iron ore, poor weather conditions in mining regions and a glut of shipping capacity. The Baltic Dry Index, a composite of commodity shipping costs around the world, fell for a 32nd consecutive session to 662. The previous low, of 663, came in December 2008, during the depths of the credit crunch. But unlike the one three years ago, this slump reflects more than a sluggish global economy. A conflation of seasonal, environmental and demand-side factors accelerated the index's decline in recent months and could tip it further into the red. The index has plunged 59% this year alone and is down 94% from the peak reached just before the crisis hit. More than anything, this collapse "is due to excessive supply of ships and shipping capacity," said Beethowen Nepomuceno, who is responsible for ocean transport at commodities-trading company Cargill Inc.'s Sao Paulo's office.
Analysts and industry players expect the glut in shipping capacity to last for several years given that vessels often operate for around 25 years. But increased scrapping and the possibility that unprofitable shipping firms could be forced out of business should eventually lend some stability to prices, they said. "If old ships exit, that could start to correct the market," Nepomuceno said. "It's an eternal game of push and shove." A big factor depressing rates is the delivery of vessels ordered when the global economy was booming in the early-to-mid-2000s and credit was freely flowing, said Mark Williams, research manager at global shipbroking firm Braemar Seascope. "Companies saw China as a never-ending story and wanted to invest their profits in new shipping capacity," he said. Now those vessels are being delivered, yet the need for all of them is no longer as obvious. The order book currently stretches to 2015, according to industry analysts, with the majority of vessels due for delivery this year.
Other, more-recent factors have aggravated the situation. Unusually heavy rains in Brazil prompted mining giant Vale SA (VALE, VALE5.BR), which produces around 25% of the world's iron ore, to invoke a clause known as "force majeure" on Jan. 11 in some contracts to free itself from penalties on delayed shipments of ore, which is primarily used to make steel. That was lifted on Jan. 23, and mining and transportation resumed. In addition, demand for iron ore in China, which consumes more than half the world's iron-ore output, has been waning in recent months; inventories at Chinese ports are near record levels. China's crude-steel output climbed 8.9% in 2011 to 695.5 million metric tons, but growth should slow to 5% this year as Beijing's efforts to cool the economy continue to bite, according to market estimates compiled by London-based The Steel Index. In addition, the Lunar New Year holiday, which essentially shut down the country for a week in January, was a temporary brake on demand.
"The shipping market has been hit by a triple whammy of bad weather, weaker Chinese iron-ore demand and public holidays," Williams of Braemar Seascope said. A longer-lasting source of pressure is Vale's order for a fleet of 35 so-called Valemax vessels that can carry 400,000 deadweight tons, making them more than twice as large as Capesizes, the next-largest carrier, which typically carry up to 180,000 deadweight tons. The super-sized ships will be used on the company's Brazil-Asia route to compete more efficiently with nearer Australia shippers. Vale docked the first of the fleet, the Berge Everest, at China's Port of Dalian in late December, with a delivery of 350,000 tons of iron ore. China's shipping industry has lobbied against such ships, fearing they may strengthen Vale's dominance on the dry bulk market and China's Ministry of Transport has restricted access of the vessels into its ports.
"The vessels have been built, so the tonnage will be there," said an analyst at a shipping firm who declined to be named. "It's going to be a tough couple of years for the shipping market."
China ministry says to bar giant ships from ports
SHANGHAI, Jan 31 (Reuters) - China will no longer allow large ships exceeding approved capacities to dock at its ports, the Ministry of Transport said, effectively snuffing Brazilian miner Vale SA's hopes of sending its mega-ships to China.
Ships exceeding approved capacities were previously assessed on a case-by-case basis, but the ministry said in a statement on its website on Tuesday that giant dry bulk vessels and oil tankers were prohibited with immediate effect.
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