RM1m floor price?
The Government is considering raising the minimum floor prices of houses foreigners are allowed to buy to RM1m from the current RM500,000 in an effort to control the rise in property prices, sources said. They said such a decision was “in the pipeline” and the implementation would be made by the economic planning unit (EPU) under the Prime Minister's Department currently headed by Minister Tan Sri Nor Mohamed Yakcop. Another source said the revised guidelines would also consider a slightly lower base price threshold of RM800,000 for residential properties in selected economic corridors such as Johor's Iskandar Malaysia to ensure the development and success of these corridor hotspots. (StarBiz)
Century Software secures RM33m contracts
Century Software Holdings secured two contracts valued at RM33.5m from the Pertubuhan Keselamatan Sosial for the social security information management systems. It said on Monday the first contract was for the social security information management system valued at RM24.5m while second contract was for the Perkeso social security information management system valued at RM9.0m. "The scope of work for the projects are to design, develop, supply, deliver, install, integrate, testing, deployment, commissioning, training and to maintain the Perkeso social security information management systems," it said. (StarBiz)
UEM Land unit to buy Johor land for RM93m
UEM Land Holding's wholly-owned subsidiary Nusajaya Premier SB (NPSB) has proposed to acquire 49.5ha of freehold land in Johor Bahru from Tanjung Bidara Ventures SB for RM93.2m cash. "The land is adjacent to Kota Iskandar and the company's existing prime development in Nusajaya, Puteri Harbour," UEM Land said. It said the proposed acquisition would allow the group to realize its original development vision for Puteri Harbour, where high density urban waterfront precincts at heart of public and private marinas are balanced with landed and high-rise residential precincts on both sides. (Malaysian Reserve)
I&P eyes repeat of RM1.4bn revenue
I&P Group SB, a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), aims to repeat the RM1.4bn revenue it chalked up last year, despite the more challenging time this year. Its managing director Datuk Jamaludin Osman said properties with gross development value of about RM3bn were expected to be put into the market this year. I&P has successfully developed several major and well-known projects, such as Bukit Damansara, Bandar Kinrara, Alam Damai,Alam Impian, Alam Sari, Temasya-Glenmarie, Bandar Baru Seri Petaling, Taman Pelangi and Taman Perling. It is learnt that the group has 3,622ha of land in the Klang Valley and Johor Baru, with 1,195ha still undeveloped. (BT)
SILK bags RM10.8m contract
SILK Holdings' subsidiary Jasa Merin (M) SB has clinched a contract extension worth RM10.8m from Petrofac Ltd. The contract, which commenced in July 2009, had a primary period of two years with the extension options of 1+1+1 year, is to be given the second extension from 23 July 2012 to 22 July 2013. The contract extension is expected to contribute positively to SILK's earnings and assets for the financial year ending 31 July 2012 and 31 July 2013, the company said in a filing to Bursa Malaysia yesterday. (Financial Daily)
Dijaya gets 8% yield boost from new assets
Dijaya Corp is poised to get an income boost after an amalgamation exercise where its major shareholder Tan Sri Danny Tan would inject assets with long-term lease arrangements and rental yield of at least 8% yearly. Dijaya said in a statement yesterday, as part of the deal, Tan has irrevocably agreed and covenanted with Dijaya, via a letter of undertaking, to procure the relevant parties to be identified, on or before the completion of the proposed acquisitions, to enter into the long-term lease. Dijaya last month proposed an amalgamation exercise whereTan will inject 73 of his privately held assets worth RM1.1bn into Dijaya, making it one of the largest property firms in the country by market capitalization. (Financial Daily)
Dijaya Corporation Bhd, a company substantially owned by Tan Sri Danny Tan Chee Sing, said it has signed 24 conditional sale and purchase agreements and 16 conditional share sale agreements with the respective vendors for RM949.9m. The payment involves RM250m cash and the balance via the issuance of a 10-year three per cent coupon Dijaya Redeemable Convertible Unsecured Loan Stock, with a staggered conversion range of RM1.30 to RM2.50 over a 10-year period. The funds are part of its plan to acquire 73 properties, comprising 49 parcels of land and 16 buildings, which was announced last month. (BT)
Syed Zainal resigns from Proton
Proton Holdings managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir has resigned, raising concerns over the future of the national car maker which was recently being taken over by conglomerate DRB-Hicom. His departure, which could presage resignations from other senior management staff in coming weeks, is due to differences with the new owners over Proton's future direction, close associates of the Proton chief and industry executives said. (Financial Daily)
Guan Chong seeks secondary listing on Main Board of SGX
Guan Chong, one of the largest cocoa processors in the region, is seeking a secondary listing on the Main Board of Singapore Exchange Securities Trading Ltd (SGX). In a statement yesterday, its managing director/ chief executive officer Brandon Tay Hoe Lian said the dual listing is to facilitate the company's access to the capital market of Singapore, giving the group the flexibility to tap into additional sources of equity funding for its expansion. (Malaysian Reserve)
MAHB will call for new tenders for KLIA2 commercial space on April 12 and April 17. The tender process, now in its third phase, will involve 37 tenders comprising retail, food and beverages (F&B), and service outlets. GM commercial services Faizah Khairuddin said tenders for KLIA2 are conducted in phases. The first phase was conducted in December last year and Phase Two in end-February to early-March this year. The airport operator received overwhelming response at the first two tenders' briefing sessions. Over 1,000 interested parties, comprising retailers, F&B and services operators, attended the sessions, Faizah said. (BT)
Boustead Holdings‟ subsidiary company, Boustead Naval Shipyard (BNS) has issued three letters of award to Contraves Advanced Devices (CAD) a subsidiary company of Boustead Heavy Industries Corporation which in turn is a subsidiary of Boustead Holdings. These are in relation to the contract for Second Generation Patrol Vessels / Littoral Combat Ships received previously by BNS from the government of Malaysia. CAD is to undertake engineering and integration works in connection with the DCNS SETIS Combat Management System, together with procurement of the CMS and the Rheinmetall Fire Control System at a total ceiling contract sum of RM1.53bn for an implementation period of up to ten (10) years from 9 Apr 12. (BMSB)
Boustead Holdings Bhd expects to improve its yield on fresh fruit bunches (FFB) by 20% to 30% using more efficient methods. Currently, Boustead's overall FFB yields are at 17.5 tonnes per hectare against the industry average of about 18.5 tonnes. Apart from the plantation division which contributed 41% to profits last year, all its other divisions were also expected to contribute an increase in earnings this year, said its deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin. Lodin added that his personal target is to have a pre-tax profit of RM1bn this year. (StarBiz)
The Federal government has allocated RM423m to upgrade the Pan Borneo Highway from Sabah to Sarawak, Works Minister Datuk Seri Shaziman Mansor said. An initial sum of RM100m would be made available soon and shared equally between the two states. He said for Sarawak, the 217km stretch between Sibu and Bintulu and the 207km stretch from Bintulu to Miri would be given priority. The Pan Borneo Highway passes through Sematan, Kuching, Miri and Lawas in Sarawak before cutting through various districts in Sabah including Sindumin, Beaufort, Kimanis, Kota Kinabalu and Tawau. (Star)
DiGi.Com Bhd is now bringing Internet access to customers and sees educating them on having the right mobile device as an important challenge. Head of Internet and Services Praveen Rajan said DiGi has about 10m customers, "Our big focus now is to get more and more people to use smartphones because unless you have the right device, you will never be able to use the Internet effectively," he said. He added DiGi is working with content providers such as Google and Apple as well as local providers to bring their services to customers and to make content available according to demand and beyond. DiGi will see its 3G coverage increased to 70% of the populated area by year-end from 52% as at end-2011. By 2013, DiGi foresees more mobile Internet users across the prepaid and postpaid segment. (Bernama)
Proton Holdings managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir has resigned. His departure, which could presage resignations from other senior management staff in the company in coming weeks, is due to differences with the new owners over Proton's future direction, close associates of the Proton chief and industry executives said. (Financial Daily)
Perodua hopes to sell its cars in South Africa by the end of this year or early next year. "We have narrowed in on South Africa and hope to make a final decision by the third quarter of this year and come up with a plan on how we want to market our cars there," Perodua managing director Datuk Aminar Rashid Salleh said. He said the company is also zeroing in on other emerging markets to help achieve its target to sell 20,000 Perodua cars overseas by 2015. On the local front, Aminar said Perodua has set aside RM50m as capital expenditure (capex) this year to help increase new vehicle sales. (BT)
NASIM expects the introduction of four new models will help the company sell up to 9,300 Peugeot cars this year. Its chief operating officer Datuk Samson Anand George said 2012's target is almost double of last year's overall sales of the continental cars, which stood at 5,400 units. Meanwhile, he said that Nasim has not seen any significant drop in its car sales despite the stricter lending guidelines imposed by Bank Negara Malaysia. (BT)
Low budget airline, AirAsia, is offering more connectivity and convenience between China and Indonesia via its enhanced Fly-Thru service. Introduced last year, the Fly-Thru is AirAsia's innovative solution to flight connections, offering guests more convenience. The direct service from Indonesian cities as Jakarta, Bandung, Medan and Surabaya to cities in China such as Guangzhou, Shenzhen, Macau and Hong Kong via AirAsia's Kuala Lumpur hub, has been extended following the popular demand for its Fly-Thru service. (BT, Bernama)
OldTown confirmed that the setting up of a food processing centre forms part of the company‟s next 5-year expansion and business plans into the China markets. It was quoted in The Edge Financial Daily that the RM5m investment in the centre is part of a joint venture between OldTown (19%), its Hong Kong-based related party, OldTown Asia Pacific (11%) and a Chinese company which holds OldTown‟s master franchise license (70%). OldTown clarified that the shareholding structure of the proposed new food processing centre is still in preliminary discussion stage and the proposed shareholding spread amongst various parties may subject to further changes in the later stage. (BMSB)
KFC Holdings will spend about RM12m in advertising, marketing and promotions for its "So Good" branding tagline, over three phases this year, MD Haji Jamaludin Md Ali said. He said in general, the branding campaign will encompass several phases, but this year, there will be three. "We are spending RM4m on the first phase and plan about the same amount for the second and third," he said. The sub-theme is expected to drive sales up by around 10-15% in the second quarter. International celebrity chef, Chef Wan, has been appointed the first phase marketing campaign spokesperson. Jamaludin said the fast food company is also set to spend some RM3m to improve the kitchen of the 300 KFC outlets with an enhanced efficiency system. Meanwhile on India, he said KFC Holdings is optimistic of opening another 16 new KFC outlets, adding to the existing 12. (BT, Bernama)
The 1Bestarinet project, which was awarded to YTL Communications Sdn Bhd (YTL Comms) is said to be worth RM663m for a period of two and a half years. However there is room for an extension of the contract period based on performance. Sources say payment would be based on a service level agreement (SLA) and a service level guarantee (SLG) to ensure that all the 9,924 government schools are wired successfully by Mar 2013. Already, 1,800 schools have been wired up. The project intends to ensure that all urban schools have a connectivity of up to 10Mbps and all rural schools up to 4Mbps. It also comes with a virtual learning platform and YTL Comms is riding on the „Frog‟ virtual learning programme for its total solution package to schools besides internet access. (Star Biz)
Scomi Engineering is hopeful that its bid for the monorail project in Chennai, the capital city of Tamil Nadu, will succeed. “The Chennai tender is coming up. We hope to be shortlisted,” country president Kanesan Velupillai said. The 111km monorail project is phase one of the 300km stretch which the state government plans to build to ease traffic flow. If successful, it would be Scomi's biggest ever monorail project. In India, Scomi emerged as a well-recognised brand after successfully implemented the country's first monorail project in the financial district of Mumbai. Scomi has also entered into a joint bidding agreement with Geodesic Techniques Pvt Ltd for the proposed 59km monorail line in Bangalore. (Star)
EITA: Secures RM115.6m order book, to last until 2013
EITA Resources, has secured a RM115.6m order book as at end-March, which is expected to keep them busy until 2013. "Of the total, RM82.7m or 71.5% of the order book comes from our elevator segment," said Group MD Fu Wing Hoon. Revenue contribution from the elevator segment has grown steadily over the years. In 2008, the segment contributed only RM31.1m revenue or 23.6% of the group's total sales that year, he said. Within three years, its elevator business grew by 68.2% to RM52.3m or 34.6% of the group's total revenue of RM151.3m in the 2011 financial year, he told a news conference in conjunction with the company's listing on Bursa Malaysia Main Board yesterday. (Bernama)
Hong Leong Bank: SC approves Hong Leong Bank’s US$1.5bn bonds
The Securities Commission has approved Hong Leong Bank’s plan to issue up to US$1.5bn (RM4.61bn) worth of bonds to finance its working capital needs. Hong Leong said the fund raising instrument comes in the form of euro-denominated medium term notes. Citigroup Global Markets Ltd, HL Bank, Mitsubishi UFJ Securities International plc and The Royal Bank of Scotland plc are arrangers and dealers for the scheme, according to Hong Leong. (Financial Daily)
Genting Bhd (RM10.84/share)
Genting’s S’pore unit to issue securities worth RM1.2bil in expansion plan A senior executive of casino operator, Genting Singapore Plc, said it is planning a second issue of perpetual securities worth about US$397.0mil (RM1.2bil) and could use the proceeds to expand into Japan and South Korea. Genting Singapore, a unit of Malaysian group Genting Bhd, plans to sell S$500.0mil (US$397.0mil) in perpetual subordinated capital securities, a hybrid of bonds and equities, to mostly retail investors. Reuters reported that this follows its S$1.8bil issue of perpetual securities last month that was sold mainly to institutional and private banking investors. Chief financial officer Lee Shi Ruh said the company is well positioned for such opportunities. She added that the potential liberalisation of Japan and South Korea’s gaming industries could follow a similar path to Singapore, which legalised casinos in 2005. Genting Singapore’s latest issue will pay an annual coupon of 5.125% until October 2022 and 6.125%after that, with the company having an option to redeem the securities in 2017. - StarBiz
Tuesday, April 10, 2012
20120410 1057 Global Market Related News.
Most Asian Stocks Gain as Japanese Exporters Gain on Yen (Source: Bloomberg)
Most Asian stocks rose as trading resumed in many markets across the region. Japanese exporters gained on a weaker yen and automakers including Toyota (7203) Motor Corp. advanced after Nomura Holdings Inc. raised target prices. Toyota advanced for the first time in nine trading sessions after Nomura said a weaker yen and higher sales in the U.S. will boost profit. Hitachi Construction Machinery Co., a Japanese machinery maker that gets a quarter of its sales in China, gained 4 percent before mainland trade data is released today. BHP Billiton Ltd., the world’s biggest miner, dropped 0.6 percent in Sydney as crude prices fell and Australia’s markets reopened after a four-day weekend. The MSCI Asia Pacific Index was little changed at 124.16 as of 10:34 a.m. on the first day this month that all Asia markets will be open. About five stocks gained for every four that fell. The MSCI Asia Pacific Index that excludes Japanese stocks edged down 0.1 percent.
Asia’s benchmark gauge has retreated 3.7 percent since the st art of March as China cut its growth target and on speculation stocks had risen too fast after the index advanced 15 percent in the first two months of the year. “People are already more or less defensively positioned and they’re taking advantage of lower valuations,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Investment Trust, which oversees the equivalent of $72.1 billion in assets. “But the basic dynamic hasn’t changed -- Asia will do relatively better than other markets.”
Japan Stocks Snap Five-Day Loss as Yen Retreats (Source: Bloomberg)
April 10 (Bloomberg) -- Japanese shares rose, with the Nikkei 225 (NKY) Stock Average snapping a five-day losing streak, as the yen retreated from a one-month high against the dollar, boosting the earnings outlook for the nation’s exporters. Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, rose 1.8 percent after Nomura Holdings Inc. raised the stock’s target price. Mitsui Fudosan Co. paced gains among real estate companies after it forecast profit will more than double. Kansai Electric Power Co. advanced 3.4 percent after Prime Minister Yoshiko Noda “basically” approved safety measures for its nuclear reactors, paving the way for them to be restarted. The Nikkei 225 rose 0.6 percent to 9,605.98 as of 9:49 a.m. in Tokyo, with volume 28 percent below the 30-day average before the Bank of Japan concludes an interest-rate policy meeting today. The broader Topix Index gained 0.8 percent to 819.91.
“We are seeing a technical rebound after stocks fell five days,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of $61 billion. “The market’s focus is on today’s BOJ meeting. They will probably take no action today, and that could weigh on stocks and boost the yen.”
U.S. Stocks Decline as Employment Report Misses Estimates (Source: Bloomberg)
U.S. stocks fell, dragging the Standard & Poor’s 500 Index lower following its worst week of 2012, after employers added fewer jobs than forecast in March. Caterpillar Inc. (CAT) and General Electric Co. (GE) sank more than 1.5 percent, pacing declines among industrial shares. Financial shares lost 1.6 percent among 10 groups in the S&P 500. Bank of America Corp. (BAC) and Citigroup Inc. erased at least 2.4 percent. Alcoa Inc. (AA), scheduled to report earnings tomorrow, slipped 0.3 percent. AOL Inc. (AOL) soared 43 percent after agreeing to sell and license patents to Microsoft Corp. The S&P 500 slumped 1.1 percent to 1,382.20 at 4 p.m. New York time, after losing 0.7 percent last week. The Dow Jones Industrial Average dropped 130.55 points, or 1 percent, to 12,929.59. About 5.5 billion shares changed hands on U.S. exchanges today, 19 percent below the three-month average. Equity markets were shut for Good Friday on April 6, when the employment report was released.
“At the moment, the one big news story that people have to focus on is the jobs number so there’s a focus on the disappointment there,” John Carey, who helps oversee about $220 billion at Pioneer Investments in Boston, said in a telephone interview. “The economy does continue to grow, but slowly, and I think that’s been the source of frustration for a lot of investors, that we haven’t had the big forward movement in the economy like we have in the past.”
U.K. Stocks Climb as Mining Rally Reverses FTSE 100 Drop (Source: Bloomberg)
U.K. stocks rose, with the FTSE 100 Index rebounding from its largest decline since November, as a rally in basic-resource shares reversed earlier losses. BHP Billiton Ltd. (BHP) and Rio Tinto Group, the biggest London- listed mining companies, advanced more than 1 percent as copper climbed. British Sky Broadcasting Group Plc (BSY) sank to a seven- month low as the pay-TV broadcaster in which Rupert Murdoch’s News Corp. owns a 39 percent stake said its Sky News channel approved the hacking of e-mails on two occasions. The FTSE 100 gained 19.9 points, or 0.4 percent, to 5,723.67 at the close in London. The gauge declined as much as 0.7 percent earlier as British manufacturing output unexpectedly contracted and concern about the euro-area debt crisis resurfaced. The FTSE All-Share Index rose 0.3 percent today, while Ireland’s ISEQ slipped less than 0.1 percent. Western European markets are closed tomorrow and April 9 for Easter.
“Investors will be pleased to see that we’re going into the Easter break without adding to yesterday’s big declines,” said Angus Campbell, the head of market analysis at Capital Spreads in London. “Negative sentiment turned positive as Spanish bond yields retreated following an earlier spike, allowing investors to dip back into beaten-up equities.”
Korean Won Near 2-Week Low on Global Economy Concern; Bonds Fall (Source: Bloomberg)
South Korea’s won traded near a two-week low as concern that the global economic recovery is losing steam damped demand for emerging-market assets. Government bonds declined. China’s overseas shipments probably rose 7 percent in March from a year earlier, compared with 18.4 percent growth the previous month, according to the median estimate in a Bloomberg News survey before official data today. Figures last week showed hiring by American employers in March trailed the most- pessimistic forecast. North Korea may test a nuclear weapon after a planned missile launch between April 12 and 16, a South Korean intelligence report showed yesterday. “China’s trade data will be important as it may offset growth concerns coming out from the U.S. or it may add oil to the fire,” said Kim Doo Hyun, a Seoul-based currency dealer at Korea Exchange Bank. (004940) “Concerns over North Korea will prevent the won from strengthening, but with the holiday tomorrow, not many traders will be betting aggressively on a weaker won.”
Yen Falls Before BOJ Decision as Japanese Stocks Rally (Source: Bloomberg)
The yen weakened against all of its 16 major counterparts amid speculation the Bank of Japan (8301) will add to monetary easing this month. The 17-nation euro was within 0.2 percent of a three-month low against the pound before France and Italy auction debt this week after yields rose at Spain’s sales last week. The New Zealand dollar declined against most peers before China releases trade data today. “There are some expectations for an easing by the BOJ,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow. “This seems to be causing yen selling.” The yen dropped 0.5 percent to 107.33 per euro as of 10:34 a.m. in Tokyo from the close in New York yesterday. It slid 0.3 percent to 81.76 per dollar. The euro was little changed at $1.3123 and traded at 82.47 U.K. pence after touching 82.30 yesterday, the lowest since Jan. 9.
FOREX-Dollar hits 1-mth low vs yen after US jobs data
SINGAPORE, April 9 (Reuters) - The dollar hit a one-month low versus the yen, extending losses after last week's lower-than-expected U.S. jobs figures bolstered views the Federal Reserve could yet adopt more monetary easing to support the economy.
"When you look at short positions in the yen, they haven't really decreased, and their size is still comparable to levels seen back in the summer of 2007," Karakama said.
Bernanke Sees Need for More Curbs on Shadow Banking (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke called on regulators to stem risks from “shadow banking” operating beyond traditional oversight and favored steps to promote the “resiliency” of money market funds. “An important lesson learned from the financial crisis is that the growth of what has been termed ‘shadow banking’ creates additional potential channels for the propagation of shocks through the financial system and the economy,” Bernanke said today in a speech in Stone Mountain, Georgia. Bernanke also called for close tracking of financial innovation and backed curbs on intraday credit in tri-party repo markets. While not specifying what steps he supports to increase stability among money market funds, he referred to Securities and Exchange Commission proposals to require firms to maintain capital buffers or to redeem shares at the market value of underlying assets rather than at a fixed price of $1.
Congress under a 2010 regulatory overhaul known as Dodd- Frank mandated the Fed to safeguard stability partly by monitoring firms whose collapse may provoke turmoil across financial markets. The law is aimed at averting a repeat of the credit crisis that was triggered by the collapse of U.S. mortgage finance and deepened by the failure of Lehman Brothers Holdings Inc. in 2008.
Profit Growth Stalls as European Slump Hampers Recovery (Source: Bloomberg)
U.S. corporate profit growth stalled in the U.S. last quarter as companies from McDonald’s Corp. (MCD) to 3M Co. (MMM) saw gains in the world’s largest economy eroded by a slump in Europe. Earnings at Standard & Poor’s 500 Index companies, excluding financials, are seen gaining 0.6 percent in the first and the second quarter from a year earlier, according to analysts’ estimates compiled by Bloomberg, the slowest growth rate since 2009. The European debt crisis and a slowdown in China are hurting S&P 500 companies, which derive about 40 percent of profits from abroad. At home, where the S&P 500 Index had its biggest first-quarter rally since 1998, consumer confidence is improving along with the job market -- boosting demand for construction companies and retailers.
“While the U.S. economy is the cleanest shirt in the hamper at the moment, we’re only talking about an economy that’s motoring along at a subpar pace,” said Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion. “The only way you’re going to see higher profitability is through faster growth.”
U.S. Employment Growth Seen Rebounding From Slump (Source: Bloomberg)
The March setback in hiring will prove temporary as the U.S. economy, in its third year of expansion, now is better equipped to overcome a slowdown in Europe and rising fuel costs, economists said. Growing sales and profits may give business leaders the confidence to take on staff at a faster clip than last month’s 120,000 gain in payrolls, according to analysts at JPMorgan Chase & Co. and Deutsche Bank Securities Inc. They say the data don’t signal a repeat of 2010 and 2011 -- when hiring was derailed after promising starts by concern about government debt, energy costs and natural disasters -- even though the total was weaker than all the estimates from 80 economists surveyed by Bloomberg News. That sentiment isn’t universal, with economists at Bank of America Corp. among those projecting employment will slump in the second half of the year as the government prepares to put the brakes on spending to tame the budget deficit.
Joseph LaVorgna and Carl Riccadonna at Deutsche Bank counter that income gains will unleash increases in household spending and hiring that will boost job creation by an average of at least 200,000 a month for all of 2012. “While the economy is going to do OK, we think jobs are going to be doing better than OK,” Bruce Kasman, chief economist at JPMorgan in New York, said in an April 6 conference call following the Labor Department’s employment report. “We don’t think today’s number represents the trend,” he said, affirming a forecast that payrolls will rise by 200,000 workers on average for the rest of the year.
Jobs Pose Challenge S&P 500 Has Overcome Nine Times (Source: Bloomberg)
U.S. employment growth that trailed economists’ forecasts in March presents a challenge that stocks have overcome nine times during the bull market that’s driven the Standard & Poor’s 500 Index up 107 percent in three years. The Labor Department’s monthly tally of U.S. hiring missed the median projection by 85,000, according to data compiled by Bloomberg. While the S&P 500 (SPX) averaged losses of 0.8 percent in the day after shortfalls of this magnitude since March 2009, the benchmark gauge cut its decline in half a week later and was up 0.9 percent after two weeks, the data show. The S&P 500 lost 1.1 percent today after the April 6 report renewed concern about the pace of the U.S. recovery. Federal Reserve Chairman Ben S. Bernanke’s March 26 pledge to keep “accommodative” monetary policy to stimulate jobs may cushion the blow, said U.S. Trust Co.’s Chris Hyzy and National Securities Corp.’s Donald Selkin. So will corporate earnings, said Wells Fargo & Co.’s Ann Miletti.
“With a bad number, the thought is, well, the Fed has ammunition,” Hyzy, who helps oversee about $325 billion as chief investment officer of U.S. Trust in New York, said in an April 6 telephone interview. “The market comes back after a drop. The only way they add liquidity is if it looks like the economic recovery is receding.”
Record Treasury Demand Keeps Yields Low as Supply Shrinks (Source: Bloomberg)
Investors are plowing into Treasuries (USB2YBC) at a record pace as the supply of the world’s safest securities dwindles, ensuring yields will stay low regardless of whether the Federal Reserve undertakes more stimulus to fight unemployment. Buyers bid $3.19 for each dollar of the $538 billion in notes and bonds sold this year, the most since the government began releasing the data in 1992 and on pace to beat the high of $3.04 in 2011. The net amount of Treasuries available will decline by 30 percent once proceeds from maturing securities are reinvested, according to data from CRT Capital Group LLC. Skepticism about the U.S. recovery, as well as signs Europe’s debt turmoil isn’t over, is enhancing demand for Treasuries. This may keep yields from surging even if Fed policy makers refrain from a third round of quantitative easing, and allow the Obama administration to finance a fourth deficit exceeding $1 trillion at near-record low costs.
“Investors are holding an overwhelming amount of cash in the system and chasing fewer securities, which has supported Treasuries,” said Dominic Konstam, global head of interest- rates research in New York at Deutsche Bank AG, one of 21 primary dealers that trade with the central bank, in an April 5 telephone interview.
Treasuries Decline Before 3-, 10-, 30-Year Auctions (Source: Bloomberg)
Treasuries snapped a gain on concern yields that fell to a four-week low will curb demand as investors bid for $66 billion of notes and bonds starting today. Ten-year notes yield negative 85 basis points after accounting for consumer prices, the biggest deficit in almost a month. The U.S. is scheduled to sell $32 billion of 3-year notes today, $21 billion of 10-year debt tomorrow and $13 billion of 30-year bonds on April 12. Ten-year notes yielded 2.05 percent as of 9:47 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent note due in February 2022 changed hands at 99 17/32. The yield was as low as 2.02 percent yesterday, the least since March 12. “Below 2 percent is an uncomfortable place to buy,” said Kei Katayama, who invests in U.S. bonds at Tokyo-based Daiwa SB Investments Ltd., which oversees the equivalent of $60.7 billion, including Asia’s second-largest mutual fund. “The U.S. economy is on a slow, steady pace of recovery,”
Russia Holds Interest Rates as Inflation Pressures Increase (Source: Bloomberg)
Russia’s central bank refrained from cutting interest rates for a fourth month after signaling that “medium-term” inflation risks are increasing. Bank Rossii left the refinancing rate at 8 percent, as predicted by 21 of 22 economists in a Bloomberg News survey. The overnight auction-based repurchase rate was kept at 5.25 percent and the overnight deposit rate will remain at 4 percent. The world’s largest energy exporter is keeping borrowing costs unchanged even after the inflation rate fell to the lowest in two decades. Current market interest rates are “acceptable for the coming months,” Bank Rossii said. China may ease policy to boost faltering growth and Brazil has cut its benchmark rate five times since August. “Medium-term inflation risks are rising because of uncertainty over the impact on consumer prices of the planned increase in most of the regulated prices and tariffs in July,” the central bank said in the statement.
Consumer prices rose 3.7 percent from year earlier in March and core inflation, which excludes volatile costs such as energy, decelerated to 5.5 percent, the regulator said today. Russia’s benchmark 30-stock Micex Index reversed gains, dropping 0.4 percent to 1,491.45 in Moscow after the announcement. The gauge had risen as much as 0.6 percent before the decision. The ruble remained little changed at 29.63 against the dollar and was steady at 38.7080 versus the euro.
China Consumer Prices Rise Faster-Than-Estimated 3.6% (Source: Bloomberg)
China’s inflation accelerated more than forecast in March on a pickup in food prices, signaling that policy makers may exercise caution in adding stimulus to boost growth. Consumer prices rose 3.6 percent from a year earlier, the National Bureau of Statistics said today. That was more than the median 3.4 percent estimate in a Bloomberg News survey of 33 economists. Food-related costs gained 7.5 percent. Premier Wen Jiabao’s officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the government’s 4 percent target for a second month. China’s economy may have expanded last quarter at the slowest pace in almost three years, showing the limits of the nation’s contribution to global growth as U.S. job growth weakens and concern mounts about Europe’s sovereign-debt crisis.
“The upside surprise in today’s CPI reading is likely to raise concerns about a possible rebound in inflationary pressures among policy makers,” said Song Yu, a Beijing-based economist with Goldman Sachs Group Inc. “The data could limit the magnitude of the policy loosening that likely started in March,” Song said, citing Goldman’s observations on the increasing supply of loans and news reports on the government easing restrictions on banks’ lending capacity.
China Consumer Prices Rise Faster-Than-Estimated 3.6% (Source: Bloomberg)
China’s inflation accelerated more than forecast in March on a pickup in food prices, signaling that policy makers may exercise caution in adding stimulus to boost growth. Consumer prices rose 3.6 percent from a year earlier, the National Bureau of Statistics said today. That was more than the median 3.4 percent estimate in a Bloomberg News survey of 33 economists. Food-related costs gained 7.5 percent. Premier Wen Jiabao’s officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the government’s 4 percent target for a second month. China’s economy may have expanded last quarter at the slowest pace in almost three years, showing the limits of the nation’s contribution to global growth as U.S. job growth weakens and concern mounts about Europe’s sovereign-debt crisis.
“The upside surprise in today’s CPI reading is likely to raise concerns about a possible rebound in inflationary pressures among policy makers,” said Song Yu, a Beijing-based economist with Goldman Sachs Group Inc. “The data could limit the magnitude of the policy loosening that likely started in March,” Song said, citing Goldman’s observations on the increasing supply of loans and news reports on the government easing restrictions on banks’ lending capacity.
Japan’s Noda Announces Anti-Deflation Talks as BOJ Sets Policy (Source: Bloomberg)
Prime Minister Yoshihiko Noda said the government will hold ministerial meetings on overcoming deflation as policy makers explore ways to end more than a decade of price declines. Economic and Fiscal Policy Minister Motohisa Furukawa will lead the discussions, Noda said yesterday according to remarks posted on the website of the prime minister’s office. Bank of Japan (8301) Governor Masaaki Shirakawa will attend the gatherings as an observer and the meetings could begin as soon as this month, the Nikkei newspaper reported, without citing where it obtained the information. Lawmakers last week blocked the appointment of BNP Paribas SA economist Ryutaro Kono to the central bank’s board, highlighting political pressure for Shirakawa’s officials to ramp up efforts to spur growth and end deflation. Noda’s announcement came with the BOJ partway through a two-day monetary policy meeting that ends today. The government wants to “escape deflation and improve the economy,” Noda said.
Singapore’s MAS to Hold Currency-Gain Pace, Survey Shows (Source: Bloomberg)
The Monetary Authority of Singapore will maintain the current pace of appreciation of the city state’s currency on speculation consumer-price gains will limit the authority’s scope to ease policy, analysts said. Officials will hold the current rate of the local dollar’s advance and refrain from altering its trading band, according to 20 of 21 financial companies surveyed by Bloomberg News. One said there is a 50 percent chance the central bank will either keep its stance unchanged or increase the band’s slope to levels prior to its last review in October. The government will announce the currency decision on April 13, the same day it releases preliminary gross domestic product data. Core inflation is “proving to be more persistent,” Khoon Goh, a Singapore-based senior currency strategist at ANZ National Bank, wrote in an e-mailed response to questions. “We see the MAS maintaining the current appreciation slope to keep inflation within target.”
The MAS is forecast to join central banks from Australia to Thailand, which refrained from raising benchmark rates this month and last as they weigh inflation risks. Economists predict policy makers in Indonesia and South Korea will also hold borrowing costs when they gather this week.
Spain Seeks 10 Billion Euros in Health, Education Savings (Source: Bloomberg)
Spain plans to save more than 10 billion euros ($13 billion) from health and education programs and will accelerate the sale of banking stakes to reduce the budget deficit amid the European debt crisis. Prime Minister Mariano Rajoy met today with ministers to discuss measures to eliminate overlaps and boost efficiencies in health and education, the government said today in a statement. Spain will also speed up the sale of its majority stakes in lenders while studying ways to increase access to credit, the administration said. Rajoy, who took office in December, is trying to narrow the deficit to 5.3 percent of gross domestic product this year from last year’s 8.5 percent. Investors, concerned he won’t be able to manage Spain’s biggest deficit reduction in at least three decades, last week pushed yields on Spanish debt to the highest since December. Rajoy twice last week referred to the possibility of Spain seeking a bailout.
Spain today reiterated its goal of cutting the deficit to 3 percent of GDP in 2013 as it expects new financial-stability measures and “structural reforms” will reverse the recession and stop job-destruction, it said.
U.K. House-Price Gauge Rises to Highest in 21 Months, RICS Says (Source: Bloomberg)
A U.K. house-price index rose to a 21-month high in March as first-time buyers sought to take advantage of an expiring property-tax exemption, the Royal Institution of Chartered Surveyors said. The gauge rose 3 points from February to minus 10, the highest reading since June 2010, according to a report today e- mailed by London-based RICS, which conducts a monthly survey of property surveyors nationwide. Still, a reading below zero shows more surveyors saw price drops than gains last month. The figures reflect Britons taking advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home costing less than 250,000 pounds ($400,000) before it ended on March 24. A continuation of this year’s upward trend in the gauge is uncertain given economic difficulties faced by the U.K., RICS Chief Economist Simon Rubinsohn said in a statement.
“Demand saw a slight boost in March as many first time buyers looked to beat the stamp duty holiday deadline,” Rubinsohn said. “There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen whether this can continue, given the changes in the budget and ongoing problems affecting the economy.”
ECB Financing for Portuguese Banks Rose to Record in March (Source: Bloomberg)
The European Central Bank’s financing for Portuguese lenders rose to a record in March, the Bank of Portugal said. ECB financing climbed to 56.3 billion euros ($74 billion) from 47.6 billion euros in February, the Bank of Portugal said today on the BPStat portion of its website. ECB financing previously peaked at 49.1 billion euros in August 2010. In April last year, Portugal became the third euro-area country after Greece and Ireland to require aid and will receive 78 billion euros under its agreement with the International Monetary Fund and the European Union. The aid plan earmarks 12 billion euros for Portugal’s lenders, if needed. As part of the plan, those lenders were required to raise core Tier 1 capital ratios to 9 percent by the end of 2011 and 10 percent by the end of 2012.
The Frankfurt-based ECB awarded 529.5 billion euros to 800 financial institutions, it said on Feb. 29. The central bank’s second round of three-year loans was designed to avert credit paralysis and ease concern that Europe’s banks would run out of cash or curb lending as the region’s sovereign-debt crisis drove up borrowing costs.
Most Asian stocks rose as trading resumed in many markets across the region. Japanese exporters gained on a weaker yen and automakers including Toyota (7203) Motor Corp. advanced after Nomura Holdings Inc. raised target prices. Toyota advanced for the first time in nine trading sessions after Nomura said a weaker yen and higher sales in the U.S. will boost profit. Hitachi Construction Machinery Co., a Japanese machinery maker that gets a quarter of its sales in China, gained 4 percent before mainland trade data is released today. BHP Billiton Ltd., the world’s biggest miner, dropped 0.6 percent in Sydney as crude prices fell and Australia’s markets reopened after a four-day weekend. The MSCI Asia Pacific Index was little changed at 124.16 as of 10:34 a.m. on the first day this month that all Asia markets will be open. About five stocks gained for every four that fell. The MSCI Asia Pacific Index that excludes Japanese stocks edged down 0.1 percent.
Asia’s benchmark gauge has retreated 3.7 percent since the st art of March as China cut its growth target and on speculation stocks had risen too fast after the index advanced 15 percent in the first two months of the year. “People are already more or less defensively positioned and they’re taking advantage of lower valuations,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Investment Trust, which oversees the equivalent of $72.1 billion in assets. “But the basic dynamic hasn’t changed -- Asia will do relatively better than other markets.”
Japan Stocks Snap Five-Day Loss as Yen Retreats (Source: Bloomberg)
April 10 (Bloomberg) -- Japanese shares rose, with the Nikkei 225 (NKY) Stock Average snapping a five-day losing streak, as the yen retreated from a one-month high against the dollar, boosting the earnings outlook for the nation’s exporters. Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, rose 1.8 percent after Nomura Holdings Inc. raised the stock’s target price. Mitsui Fudosan Co. paced gains among real estate companies after it forecast profit will more than double. Kansai Electric Power Co. advanced 3.4 percent after Prime Minister Yoshiko Noda “basically” approved safety measures for its nuclear reactors, paving the way for them to be restarted. The Nikkei 225 rose 0.6 percent to 9,605.98 as of 9:49 a.m. in Tokyo, with volume 28 percent below the 30-day average before the Bank of Japan concludes an interest-rate policy meeting today. The broader Topix Index gained 0.8 percent to 819.91.
“We are seeing a technical rebound after stocks fell five days,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of $61 billion. “The market’s focus is on today’s BOJ meeting. They will probably take no action today, and that could weigh on stocks and boost the yen.”
U.S. Stocks Decline as Employment Report Misses Estimates (Source: Bloomberg)
U.S. stocks fell, dragging the Standard & Poor’s 500 Index lower following its worst week of 2012, after employers added fewer jobs than forecast in March. Caterpillar Inc. (CAT) and General Electric Co. (GE) sank more than 1.5 percent, pacing declines among industrial shares. Financial shares lost 1.6 percent among 10 groups in the S&P 500. Bank of America Corp. (BAC) and Citigroup Inc. erased at least 2.4 percent. Alcoa Inc. (AA), scheduled to report earnings tomorrow, slipped 0.3 percent. AOL Inc. (AOL) soared 43 percent after agreeing to sell and license patents to Microsoft Corp. The S&P 500 slumped 1.1 percent to 1,382.20 at 4 p.m. New York time, after losing 0.7 percent last week. The Dow Jones Industrial Average dropped 130.55 points, or 1 percent, to 12,929.59. About 5.5 billion shares changed hands on U.S. exchanges today, 19 percent below the three-month average. Equity markets were shut for Good Friday on April 6, when the employment report was released.
“At the moment, the one big news story that people have to focus on is the jobs number so there’s a focus on the disappointment there,” John Carey, who helps oversee about $220 billion at Pioneer Investments in Boston, said in a telephone interview. “The economy does continue to grow, but slowly, and I think that’s been the source of frustration for a lot of investors, that we haven’t had the big forward movement in the economy like we have in the past.”
U.K. Stocks Climb as Mining Rally Reverses FTSE 100 Drop (Source: Bloomberg)
U.K. stocks rose, with the FTSE 100 Index rebounding from its largest decline since November, as a rally in basic-resource shares reversed earlier losses. BHP Billiton Ltd. (BHP) and Rio Tinto Group, the biggest London- listed mining companies, advanced more than 1 percent as copper climbed. British Sky Broadcasting Group Plc (BSY) sank to a seven- month low as the pay-TV broadcaster in which Rupert Murdoch’s News Corp. owns a 39 percent stake said its Sky News channel approved the hacking of e-mails on two occasions. The FTSE 100 gained 19.9 points, or 0.4 percent, to 5,723.67 at the close in London. The gauge declined as much as 0.7 percent earlier as British manufacturing output unexpectedly contracted and concern about the euro-area debt crisis resurfaced. The FTSE All-Share Index rose 0.3 percent today, while Ireland’s ISEQ slipped less than 0.1 percent. Western European markets are closed tomorrow and April 9 for Easter.
“Investors will be pleased to see that we’re going into the Easter break without adding to yesterday’s big declines,” said Angus Campbell, the head of market analysis at Capital Spreads in London. “Negative sentiment turned positive as Spanish bond yields retreated following an earlier spike, allowing investors to dip back into beaten-up equities.”
Korean Won Near 2-Week Low on Global Economy Concern; Bonds Fall (Source: Bloomberg)
South Korea’s won traded near a two-week low as concern that the global economic recovery is losing steam damped demand for emerging-market assets. Government bonds declined. China’s overseas shipments probably rose 7 percent in March from a year earlier, compared with 18.4 percent growth the previous month, according to the median estimate in a Bloomberg News survey before official data today. Figures last week showed hiring by American employers in March trailed the most- pessimistic forecast. North Korea may test a nuclear weapon after a planned missile launch between April 12 and 16, a South Korean intelligence report showed yesterday. “China’s trade data will be important as it may offset growth concerns coming out from the U.S. or it may add oil to the fire,” said Kim Doo Hyun, a Seoul-based currency dealer at Korea Exchange Bank. (004940) “Concerns over North Korea will prevent the won from strengthening, but with the holiday tomorrow, not many traders will be betting aggressively on a weaker won.”
Yen Falls Before BOJ Decision as Japanese Stocks Rally (Source: Bloomberg)
The yen weakened against all of its 16 major counterparts amid speculation the Bank of Japan (8301) will add to monetary easing this month. The 17-nation euro was within 0.2 percent of a three-month low against the pound before France and Italy auction debt this week after yields rose at Spain’s sales last week. The New Zealand dollar declined against most peers before China releases trade data today. “There are some expectations for an easing by the BOJ,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow. “This seems to be causing yen selling.” The yen dropped 0.5 percent to 107.33 per euro as of 10:34 a.m. in Tokyo from the close in New York yesterday. It slid 0.3 percent to 81.76 per dollar. The euro was little changed at $1.3123 and traded at 82.47 U.K. pence after touching 82.30 yesterday, the lowest since Jan. 9.
FOREX-Dollar hits 1-mth low vs yen after US jobs data
SINGAPORE, April 9 (Reuters) - The dollar hit a one-month low versus the yen, extending losses after last week's lower-than-expected U.S. jobs figures bolstered views the Federal Reserve could yet adopt more monetary easing to support the economy.
"When you look at short positions in the yen, they haven't really decreased, and their size is still comparable to levels seen back in the summer of 2007," Karakama said.
Bernanke Sees Need for More Curbs on Shadow Banking (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke called on regulators to stem risks from “shadow banking” operating beyond traditional oversight and favored steps to promote the “resiliency” of money market funds. “An important lesson learned from the financial crisis is that the growth of what has been termed ‘shadow banking’ creates additional potential channels for the propagation of shocks through the financial system and the economy,” Bernanke said today in a speech in Stone Mountain, Georgia. Bernanke also called for close tracking of financial innovation and backed curbs on intraday credit in tri-party repo markets. While not specifying what steps he supports to increase stability among money market funds, he referred to Securities and Exchange Commission proposals to require firms to maintain capital buffers or to redeem shares at the market value of underlying assets rather than at a fixed price of $1.
Congress under a 2010 regulatory overhaul known as Dodd- Frank mandated the Fed to safeguard stability partly by monitoring firms whose collapse may provoke turmoil across financial markets. The law is aimed at averting a repeat of the credit crisis that was triggered by the collapse of U.S. mortgage finance and deepened by the failure of Lehman Brothers Holdings Inc. in 2008.
Profit Growth Stalls as European Slump Hampers Recovery (Source: Bloomberg)
U.S. corporate profit growth stalled in the U.S. last quarter as companies from McDonald’s Corp. (MCD) to 3M Co. (MMM) saw gains in the world’s largest economy eroded by a slump in Europe. Earnings at Standard & Poor’s 500 Index companies, excluding financials, are seen gaining 0.6 percent in the first and the second quarter from a year earlier, according to analysts’ estimates compiled by Bloomberg, the slowest growth rate since 2009. The European debt crisis and a slowdown in China are hurting S&P 500 companies, which derive about 40 percent of profits from abroad. At home, where the S&P 500 Index had its biggest first-quarter rally since 1998, consumer confidence is improving along with the job market -- boosting demand for construction companies and retailers.
“While the U.S. economy is the cleanest shirt in the hamper at the moment, we’re only talking about an economy that’s motoring along at a subpar pace,” said Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion. “The only way you’re going to see higher profitability is through faster growth.”
U.S. Employment Growth Seen Rebounding From Slump (Source: Bloomberg)
The March setback in hiring will prove temporary as the U.S. economy, in its third year of expansion, now is better equipped to overcome a slowdown in Europe and rising fuel costs, economists said. Growing sales and profits may give business leaders the confidence to take on staff at a faster clip than last month’s 120,000 gain in payrolls, according to analysts at JPMorgan Chase & Co. and Deutsche Bank Securities Inc. They say the data don’t signal a repeat of 2010 and 2011 -- when hiring was derailed after promising starts by concern about government debt, energy costs and natural disasters -- even though the total was weaker than all the estimates from 80 economists surveyed by Bloomberg News. That sentiment isn’t universal, with economists at Bank of America Corp. among those projecting employment will slump in the second half of the year as the government prepares to put the brakes on spending to tame the budget deficit.
Joseph LaVorgna and Carl Riccadonna at Deutsche Bank counter that income gains will unleash increases in household spending and hiring that will boost job creation by an average of at least 200,000 a month for all of 2012. “While the economy is going to do OK, we think jobs are going to be doing better than OK,” Bruce Kasman, chief economist at JPMorgan in New York, said in an April 6 conference call following the Labor Department’s employment report. “We don’t think today’s number represents the trend,” he said, affirming a forecast that payrolls will rise by 200,000 workers on average for the rest of the year.
Jobs Pose Challenge S&P 500 Has Overcome Nine Times (Source: Bloomberg)
U.S. employment growth that trailed economists’ forecasts in March presents a challenge that stocks have overcome nine times during the bull market that’s driven the Standard & Poor’s 500 Index up 107 percent in three years. The Labor Department’s monthly tally of U.S. hiring missed the median projection by 85,000, according to data compiled by Bloomberg. While the S&P 500 (SPX) averaged losses of 0.8 percent in the day after shortfalls of this magnitude since March 2009, the benchmark gauge cut its decline in half a week later and was up 0.9 percent after two weeks, the data show. The S&P 500 lost 1.1 percent today after the April 6 report renewed concern about the pace of the U.S. recovery. Federal Reserve Chairman Ben S. Bernanke’s March 26 pledge to keep “accommodative” monetary policy to stimulate jobs may cushion the blow, said U.S. Trust Co.’s Chris Hyzy and National Securities Corp.’s Donald Selkin. So will corporate earnings, said Wells Fargo & Co.’s Ann Miletti.
“With a bad number, the thought is, well, the Fed has ammunition,” Hyzy, who helps oversee about $325 billion as chief investment officer of U.S. Trust in New York, said in an April 6 telephone interview. “The market comes back after a drop. The only way they add liquidity is if it looks like the economic recovery is receding.”
Record Treasury Demand Keeps Yields Low as Supply Shrinks (Source: Bloomberg)
Investors are plowing into Treasuries (USB2YBC) at a record pace as the supply of the world’s safest securities dwindles, ensuring yields will stay low regardless of whether the Federal Reserve undertakes more stimulus to fight unemployment. Buyers bid $3.19 for each dollar of the $538 billion in notes and bonds sold this year, the most since the government began releasing the data in 1992 and on pace to beat the high of $3.04 in 2011. The net amount of Treasuries available will decline by 30 percent once proceeds from maturing securities are reinvested, according to data from CRT Capital Group LLC. Skepticism about the U.S. recovery, as well as signs Europe’s debt turmoil isn’t over, is enhancing demand for Treasuries. This may keep yields from surging even if Fed policy makers refrain from a third round of quantitative easing, and allow the Obama administration to finance a fourth deficit exceeding $1 trillion at near-record low costs.
“Investors are holding an overwhelming amount of cash in the system and chasing fewer securities, which has supported Treasuries,” said Dominic Konstam, global head of interest- rates research in New York at Deutsche Bank AG, one of 21 primary dealers that trade with the central bank, in an April 5 telephone interview.
Treasuries Decline Before 3-, 10-, 30-Year Auctions (Source: Bloomberg)
Treasuries snapped a gain on concern yields that fell to a four-week low will curb demand as investors bid for $66 billion of notes and bonds starting today. Ten-year notes yield negative 85 basis points after accounting for consumer prices, the biggest deficit in almost a month. The U.S. is scheduled to sell $32 billion of 3-year notes today, $21 billion of 10-year debt tomorrow and $13 billion of 30-year bonds on April 12. Ten-year notes yielded 2.05 percent as of 9:47 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent note due in February 2022 changed hands at 99 17/32. The yield was as low as 2.02 percent yesterday, the least since March 12. “Below 2 percent is an uncomfortable place to buy,” said Kei Katayama, who invests in U.S. bonds at Tokyo-based Daiwa SB Investments Ltd., which oversees the equivalent of $60.7 billion, including Asia’s second-largest mutual fund. “The U.S. economy is on a slow, steady pace of recovery,”
Russia Holds Interest Rates as Inflation Pressures Increase (Source: Bloomberg)
Russia’s central bank refrained from cutting interest rates for a fourth month after signaling that “medium-term” inflation risks are increasing. Bank Rossii left the refinancing rate at 8 percent, as predicted by 21 of 22 economists in a Bloomberg News survey. The overnight auction-based repurchase rate was kept at 5.25 percent and the overnight deposit rate will remain at 4 percent. The world’s largest energy exporter is keeping borrowing costs unchanged even after the inflation rate fell to the lowest in two decades. Current market interest rates are “acceptable for the coming months,” Bank Rossii said. China may ease policy to boost faltering growth and Brazil has cut its benchmark rate five times since August. “Medium-term inflation risks are rising because of uncertainty over the impact on consumer prices of the planned increase in most of the regulated prices and tariffs in July,” the central bank said in the statement.
Consumer prices rose 3.7 percent from year earlier in March and core inflation, which excludes volatile costs such as energy, decelerated to 5.5 percent, the regulator said today. Russia’s benchmark 30-stock Micex Index reversed gains, dropping 0.4 percent to 1,491.45 in Moscow after the announcement. The gauge had risen as much as 0.6 percent before the decision. The ruble remained little changed at 29.63 against the dollar and was steady at 38.7080 versus the euro.
China Consumer Prices Rise Faster-Than-Estimated 3.6% (Source: Bloomberg)
China’s inflation accelerated more than forecast in March on a pickup in food prices, signaling that policy makers may exercise caution in adding stimulus to boost growth. Consumer prices rose 3.6 percent from a year earlier, the National Bureau of Statistics said today. That was more than the median 3.4 percent estimate in a Bloomberg News survey of 33 economists. Food-related costs gained 7.5 percent. Premier Wen Jiabao’s officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the government’s 4 percent target for a second month. China’s economy may have expanded last quarter at the slowest pace in almost three years, showing the limits of the nation’s contribution to global growth as U.S. job growth weakens and concern mounts about Europe’s sovereign-debt crisis.
“The upside surprise in today’s CPI reading is likely to raise concerns about a possible rebound in inflationary pressures among policy makers,” said Song Yu, a Beijing-based economist with Goldman Sachs Group Inc. “The data could limit the magnitude of the policy loosening that likely started in March,” Song said, citing Goldman’s observations on the increasing supply of loans and news reports on the government easing restrictions on banks’ lending capacity.
China Consumer Prices Rise Faster-Than-Estimated 3.6% (Source: Bloomberg)
China’s inflation accelerated more than forecast in March on a pickup in food prices, signaling that policy makers may exercise caution in adding stimulus to boost growth. Consumer prices rose 3.6 percent from a year earlier, the National Bureau of Statistics said today. That was more than the median 3.4 percent estimate in a Bloomberg News survey of 33 economists. Food-related costs gained 7.5 percent. Premier Wen Jiabao’s officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the government’s 4 percent target for a second month. China’s economy may have expanded last quarter at the slowest pace in almost three years, showing the limits of the nation’s contribution to global growth as U.S. job growth weakens and concern mounts about Europe’s sovereign-debt crisis.
“The upside surprise in today’s CPI reading is likely to raise concerns about a possible rebound in inflationary pressures among policy makers,” said Song Yu, a Beijing-based economist with Goldman Sachs Group Inc. “The data could limit the magnitude of the policy loosening that likely started in March,” Song said, citing Goldman’s observations on the increasing supply of loans and news reports on the government easing restrictions on banks’ lending capacity.
Japan’s Noda Announces Anti-Deflation Talks as BOJ Sets Policy (Source: Bloomberg)
Prime Minister Yoshihiko Noda said the government will hold ministerial meetings on overcoming deflation as policy makers explore ways to end more than a decade of price declines. Economic and Fiscal Policy Minister Motohisa Furukawa will lead the discussions, Noda said yesterday according to remarks posted on the website of the prime minister’s office. Bank of Japan (8301) Governor Masaaki Shirakawa will attend the gatherings as an observer and the meetings could begin as soon as this month, the Nikkei newspaper reported, without citing where it obtained the information. Lawmakers last week blocked the appointment of BNP Paribas SA economist Ryutaro Kono to the central bank’s board, highlighting political pressure for Shirakawa’s officials to ramp up efforts to spur growth and end deflation. Noda’s announcement came with the BOJ partway through a two-day monetary policy meeting that ends today. The government wants to “escape deflation and improve the economy,” Noda said.
Singapore’s MAS to Hold Currency-Gain Pace, Survey Shows (Source: Bloomberg)
The Monetary Authority of Singapore will maintain the current pace of appreciation of the city state’s currency on speculation consumer-price gains will limit the authority’s scope to ease policy, analysts said. Officials will hold the current rate of the local dollar’s advance and refrain from altering its trading band, according to 20 of 21 financial companies surveyed by Bloomberg News. One said there is a 50 percent chance the central bank will either keep its stance unchanged or increase the band’s slope to levels prior to its last review in October. The government will announce the currency decision on April 13, the same day it releases preliminary gross domestic product data. Core inflation is “proving to be more persistent,” Khoon Goh, a Singapore-based senior currency strategist at ANZ National Bank, wrote in an e-mailed response to questions. “We see the MAS maintaining the current appreciation slope to keep inflation within target.”
The MAS is forecast to join central banks from Australia to Thailand, which refrained from raising benchmark rates this month and last as they weigh inflation risks. Economists predict policy makers in Indonesia and South Korea will also hold borrowing costs when they gather this week.
Spain Seeks 10 Billion Euros in Health, Education Savings (Source: Bloomberg)
Spain plans to save more than 10 billion euros ($13 billion) from health and education programs and will accelerate the sale of banking stakes to reduce the budget deficit amid the European debt crisis. Prime Minister Mariano Rajoy met today with ministers to discuss measures to eliminate overlaps and boost efficiencies in health and education, the government said today in a statement. Spain will also speed up the sale of its majority stakes in lenders while studying ways to increase access to credit, the administration said. Rajoy, who took office in December, is trying to narrow the deficit to 5.3 percent of gross domestic product this year from last year’s 8.5 percent. Investors, concerned he won’t be able to manage Spain’s biggest deficit reduction in at least three decades, last week pushed yields on Spanish debt to the highest since December. Rajoy twice last week referred to the possibility of Spain seeking a bailout.
Spain today reiterated its goal of cutting the deficit to 3 percent of GDP in 2013 as it expects new financial-stability measures and “structural reforms” will reverse the recession and stop job-destruction, it said.
U.K. House-Price Gauge Rises to Highest in 21 Months, RICS Says (Source: Bloomberg)
A U.K. house-price index rose to a 21-month high in March as first-time buyers sought to take advantage of an expiring property-tax exemption, the Royal Institution of Chartered Surveyors said. The gauge rose 3 points from February to minus 10, the highest reading since June 2010, according to a report today e- mailed by London-based RICS, which conducts a monthly survey of property surveyors nationwide. Still, a reading below zero shows more surveyors saw price drops than gains last month. The figures reflect Britons taking advantage of a two-year stamp-duty exemption for first-time buyers purchasing a home costing less than 250,000 pounds ($400,000) before it ended on March 24. A continuation of this year’s upward trend in the gauge is uncertain given economic difficulties faced by the U.K., RICS Chief Economist Simon Rubinsohn said in a statement.
“Demand saw a slight boost in March as many first time buyers looked to beat the stamp duty holiday deadline,” Rubinsohn said. “There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen whether this can continue, given the changes in the budget and ongoing problems affecting the economy.”
ECB Financing for Portuguese Banks Rose to Record in March (Source: Bloomberg)
The European Central Bank’s financing for Portuguese lenders rose to a record in March, the Bank of Portugal said. ECB financing climbed to 56.3 billion euros ($74 billion) from 47.6 billion euros in February, the Bank of Portugal said today on the BPStat portion of its website. ECB financing previously peaked at 49.1 billion euros in August 2010. In April last year, Portugal became the third euro-area country after Greece and Ireland to require aid and will receive 78 billion euros under its agreement with the International Monetary Fund and the European Union. The aid plan earmarks 12 billion euros for Portugal’s lenders, if needed. As part of the plan, those lenders were required to raise core Tier 1 capital ratios to 9 percent by the end of 2011 and 10 percent by the end of 2012.
The Frankfurt-based ECB awarded 529.5 billion euros to 800 financial institutions, it said on Feb. 29. The central bank’s second round of three-year loans was designed to avert credit paralysis and ease concern that Europe’s banks would run out of cash or curb lending as the region’s sovereign-debt crisis drove up borrowing costs.
20120410 1057 Global Commodities Related News.
Hedge Funds Cut Commodity Bets on Fed’s Stimulus Signals (Source: Bloomberg)
Hedge funds reduced bullish bets on commodities for a second consecutive week as the Federal Reserve signaled it may refrain from more monetary stimulus, increasing concern that growth will slow and curb demand for raw materials. Money managers lowered net-long positions across 18 U.S. futures and options by 2.8 percent to 1.1 million contracts in the week ended April 3, data from the Commodity Futures Trading Commission show. Bets on higher corn prices fell to the lowest since February, while those on hogs dropped by the most since May. Speculators cut wagers on costlier crude oil for a third week, and are now the least bullish in two months. Minutes from the March 13 Fed policy meeting released April 3 showed policy makers will probably hold off on increasing monetary accommodation unless the U.S. economic expansion falters.
The Standard & Poor’s GSCI gauge of 24 commodities rose more than 80 percent from December 2008 to June 2011 as the central bank set rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. The U.S. economy will accelerate this quarter and the next, economist estimates compiled by Bloomberg show. “The market is addicted to stimulus,” said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management who helps oversee $1 billion of assets. “This market has risen because of the liquidity push and the market will decline when it’s deprived of liquidity.”
GRAINS-US soy at 7-month top on exports; corn, wheat rise (Source: CME)
By Thomson Reuters - Mon 09 Apr 2012 11:36:10 CT
Chicago soy climbed to its highest in more than seven months rising for a third straight session as strong U.S. exports and shrinking South American supplies buoyed the market. "U.S. export sales report showed that there is strong demand for not just soybeans but also grains," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
GRAINS-US soy at 7-month top on exports; corn, wheat rise
SINGAPORE, April 9 (Reuters) - Chicago soy climbed to its highest in more than seven months rising for a third straight session as strong U.S. exports and shrinking South American supplies buoyed the market.
"U.S. export sales report showed that there is strong demand for not just soybeans but also grains," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
Bulgaria expects lower 2012 grains crop
SOFIA, April 6 (Reuters) - Bulgaria's wheat and barley crops are likely to be lower than a year ago after dry weather in autumn and cold snaps in the winter hit sowings, a senior agriculture official said on Friday.
The Balkan country reaped 4.3 million tonnes of wheat in 2011 and 670,000 tonnes of barley, a huge part of which was exported, mainly to Spain.
Iran set to buy more grain; poor crop fuels stockpiling
LONDON/HAMBURG, April 5 (Reuters) - Iran is at risk of a poor grain crop which could force it to look for more wheat imports in coming months as Western sanctions already disrupt its food imports, traders said on Thursday.
Iran bought wheat on international markets at a frantic pace in March, ordering a large part of its expected yearly requirement in a little over one month.
Drought hits 4 mln ha of China's crops -Xinhua
BEIJING, April 5 (Reuters) - About 4 million hectares of crops are suffering from a severe drought in China that has hit 13 provinces including the major farming province of Sichuan in southwest China, state news agency Xinhua said.
The drought has left 7.8 million people and 4.6 million livestock without adequate drinking water in provinces including Yunnan, Hebei, Shanxi and Gansu as of Thursday, Xinhua said.
Corn - Old-crop corn futures settled low-range with losses of 9 1/4 and 11 cents in the May and July contracts, respectively. Deferred futures were steady to 3 1/2 cents lower which was a mid-range close. Focus today was on readying positions for tomorrow’s Supply & Demand Report, with the predominant action being bull spread unwinding. Traders expect the report to show tight old-crop supplies of 717 million bu., but recent USDA report surprises have made them unwilling to "bet" heavily on pre-report expectations. (Source: CME)
Corn Market Recap for 4/9/2012 (Source: CME)
Mon 09 Apr 2012 14:18:00 CT
May Corn finished down 9 1/4 at 649, 15 1/4 off the high and 1/2 up from the low. July Corn closed down 11 at 641 1/4. This was equal to the low and 16 1/4 off the high. May corn opened 1/4 cent lower from the close posted last Thursday but eventually corn managed a sharp range down move on the charts. It is possible that the reversal in November soybeans provided some additive pressure to corn today. Many traders think that corn was seeing fresh pressure from changing views toward the upcoming report, while others think the lack of a distinct frost impact might have caused some of the selling today, as the market at times last week was pricing in the prospect of some frost damage. With a hard range down move in US equities today and with US grain inspections for corn this morning of only 22.364 million bushels this morning (off expectations of 28 to 32 million bushels) the inspections news might have been considered a little bearish toward corn prices today. While some analysts think that US corn stocks might be reduced in the USDA report Tuesday, that theory might have been mostly factored into corn prices with the rallies between March 29th and April 3rd. It is also possible that the corn trade was factoring in a record pace of US corn plantings as that report was due out after the Tuesday US trade window. May Rice finished down 0.17 at 14.875, 0.025 off the high and 0.075 up from the low.
Wheat - Futures closed mostly 3 to 4 cents higher in Chicago, narrowly mixed in Kansas City and fractionally to 2 cents higher in most Minneapolis contracts. That was good for a mid-range close in Chicago and Minneapolis, while Kansas City futures ended low-range. Wheat futures were lightly supported by mild short-covering ahead of USDA's Supply & Demand Report Tuesday morning. Traders are anticipating a downtick in the old-crop carryover projection, but supplies are abundant domestically and globally, which will keep the wheat market from leading a price rally even if USDA lowers its carryover peg. (Source: CME)
Wheat Market Recap Report (Source: CME)
Mon 09 Apr 2012 14:18:01 CT
May Wheat finished up 4 1/2 at 643, 6 off the high and 6 1/2 up from the low. July Wheat closed up 2 3/4 at 649. This was 4 3/4 up from the low and 6 1/4 off the high. May wheat opened higher on the session and generally managed to remain in positive ground throughout the US trade. The market seemed to get an early bounce on short covering off ongoing fears of cold weather and perhaps from position squaring ahead of the Tuesday USDA report. However, the wheat market quickly traded back toward the near the lows of the day, as the fear of cold declined and outside market forces stepped and weighed on a number of physical commodity markets like wheat. Weekly USDA wheat export inspections, released 1/2 hour after the open, came in at 17.605 million bushels, which was about as expected. Inspections for the previous week were revised up from 15.391 million to 15.835 million. May Oats closed up 1 1/4 at 338 1/4. This was 2 up from the low and 3 3/4 off the high.
Indonesia 11/12 cotton imports seen down
April 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"International cotton price volatility throughout calendar year 2011 severely impacted Indonesian cotton spinners' capacity to import. For marketing year 2011/12, Post expects that Indonesian cotton imports will decline to 1.8 million bales, compared to 2.1 million bales in MY 2010/11. In MY 2011/12, the market share for U.S. cotton in Indonesia is also estimated to decline, primarily due to strong competition from Australia."
Egypt cotton area seen down 30 pct
"Post forecasts total area planted in 2012/2013 to decrease by 30 percent to 154,000 hectares versus 220,000 hectares in 2011/2012. Farmers are reluctant to grow cotton after many were unable to sell their 2011/2012 production in a timely manner and at a high enough price. Production of lint cotton is forecast to decrease by 27 percent at 550,000 bales versus 745,000 bales in 2011/2012.
Total domestic consumption is forecast at 630,000 bales compared to 535,000 bales in 2011/2012. Imports are forecast to increase to 560,000 bales versus 200,000 bales in 2011/2012 season. Imports in 2011/12 were impacted by the ban on cotton imports from October 2011 through March 2012. Exports are forecast to increase to 440,000 bales versus 400,000 bales during the 2011/2012 season."
Thailand 11/12 cotton imports seen down
"MY2011/12 cotton imports will likely decline 20-30 percent from the previous year to 1.3 million bales in anticipation of a global economic slowdown. In addition, the widespread flooding in the last quarter of 2011 affected the textile industry, particularly spinners, as many companies closed down their facilities. However, a recovery is expected in MY2012/13 which will increase import demand by 20-30 percent to 1.6 million bales from MY2011/12."
Cotton - Futures staged an upside day of trade and settled mid-range with gains ranging from 62 to 144 points. Cotton futures received a boost from news India’s trade minister said the country will not issue new cotton export permits, at least until the completion of an examination of last month’s export permits to see if cotton was being stockpiled elsewhere -- namely China. As India is the world’s second largest cotton producer, this opens the door to more export demand for U.S. cotton. (Source: CME)
Uganda coffee exports below target in March - UCDA
KAMPALA, April 5 (Reuters) - Uganda exported a below-target 187,595 60-kg bags of coffee in March compared with 223,099 bags a year earlier as the harvest drew to an end, a source at the state-run Uganda Coffee Development Authority (UCDA) said on Thursday.
"We had anticipated this decline. The main reason is that the major harvest in east and central regions is tailing off so yields are low," the industry source said.
Brent slips below $123 on Iran talks, US jobs data
SINGAPORE, April 9 (Reuters) - Brent crude futures slipped $1 after Iran agreed to resume talks on its nuclear programme, easing fears of a supply disruption in the Middle East.
"The impending talks on Iran's nuclear programme are a step in the right direction, but this issue will continue to set a high floor on oil prices," said Victor Shum, senior partner at oil consultancy Purvin & Gertz.
Iraq says OPEC seeking world oil price balance
BAGHDAD, April 9 (Reuters) - OPEC is seeking a balance in world oil prices, but political instability rather than production issues are affecting the market price, Iraqi Oil Minister Abdul Kareem Luaibi said on Monday.
Brent crude slipped around $1 on Monday after Iran agreed to resume talks on its disputed nuclear programme, easing fears over a supply disruption, and prices were under pressure on demand growth concerns.
Saudi to supply full May crude to Asia -source
TOKYO, April 9 (Reuters) - Saudi Arabia, the world's top crude exporter, will supply full contracted volumes of crude oil in May to at least one Asian term buyer, unchanged from April, an industry source familiar with the matter said on Monday.
Saudi Arabia made no changes to the operational tolerance in the supply allocation, the source added, meaning buyers have the option of asking for cargoes to be loaded with up to 10 percent more or less crude than contracted.
China ship insurer deals new blow to Iran oil exports
SINGAPORE, April 5 (Reuters) - A major Chinese ship insurer will halt cover for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC's second largest producer, two officials from the insurance provider told Reuters on Thursday.
This is the first sign that refiners in China, Iran's top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran's other top customers -- India, Japan and South Korea -- are running into similar problems, raising questions on how Tehran will be able to continue to export the bulk of its oil.
In Iraq, oil majors play north versus south
April 5 (Reuters) - In the weeks before Iraqi Kurdistan revealed that Exxon Mobil had signed up to explore for oil there, executives at rival Shell faced a dilemma over whether or not to join the U.S. oil major in its foray north and risk angering Baghdad.
The fields in the autonomous region offered rich potential, an easier working environment, better security and attractive contracts. That seemed a winning combination for smaller oil companies already working there, such as Norway's DNO even though they struggled to collect profits.
Oil Trades Near One-Week Low Amid Forecast Stockpile Gain (Source: Bloomberg)
Oil traded near the lowest price in almost a week in New York on speculation U.S. crude stockpiles rose to the highest level for this time of year since 1990. Futures were little changed after falling 0.8 percent yesterday as U.S. March employment data showed fewer jobs were added than the lowest forecast in a Bloomberg News survey of economists. Crude inventories probably increased 2 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow. Oil has climbed this year on concern that tension with Iran will disrupt global supplies. “There is some risk to the demand-growth scenario at a time when oil prices are high and have quite a large premium built into them,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The outlook could be for some further weakness if we start to see statistics on the demand side confirming these possible early warning signs.”
Oil for May delivery was at $102.55 a barrel, up 9 cents, in electronic trading on the New York Mercantile Exchange at 11:27 a.m. Sydney time. The contract yesterday declined 85 cents to $102.46, the lowest close since April 4. Prices are up 3.8 percent this year.
Alcoa Sees Aluminum Cuts as Production Gains: Commodities (Source: Bloomberg)
Alcoa Inc. (AA) Chief Executive Officer Klaus Kleinfeld said in January China’s aluminum industry would cut 1.1 million metric tons of unprofitable capacity “pretty soon.” So far that prediction isn’t close to coming true. China’s aluminum industry, the world’s largest, saw output rise 18 percent in the first two months of the year, according to International Aluminum Association data. That’s helped to boost global supplies and create a surplus of the metal while curbing prices, which are down 22 percent from a year ago. Declining prices and rising energy costs have eroded smelting margins, prompting New York-based Alcoa and its Norwegian competitor Norsk Hydro ASA (NHY) to announce 771,000 metric tons of capacity cuts this year. China’s smelters are avoiding that fate because they don’t appear to be paying market rates for power, said Ken Hoffman, an analyst at Bloomberg Industries.
Chinese plants owned by local governments are resisting closures in order to preserve jobs, said Lloyd O’Carroll, an analyst at Davenport & Co. “If production is not economic, at some point it will be shut down,” O’Carroll, who is based in Richmond, Virginia, said in an interview. “The question is how long will it take.”
Ship Rates Seen Rising Most Since 2009 as Owners Anchor (Source: Bloomberg)
Ship owners are anchoring the most commodity carriers since at least 2008 after the biggest slump in rates for more than a decade, cutting capacity just as Brazilian farmers prepare for record soybean exports. More than 25 percent of the Panamax fleet was anchored last month, the most in data compiled by Bloomberg since 2008. Daily rates for the 750-foot-long vessels will average $10,000 this quarter, 25 percent more than in the first three months and the biggest increase in more than two years, the median of nine analyst estimates shows. Shares of Athens-based Safe Bulkers (SB) Inc., which owns 18 Panamaxes, will rise 35 percent in 12 months, according to the average of seven predictions.
Rates have been below the $13,000 owners need to break even every day this year, spurring more idling. The slump reflects a glut of capacity rather than less trade, with Clarkson Plc, the biggest shipbroker, forecasting record volume in 2012. Owners with fleets of 20 vessels or more may keep anchoring some ships to boost rates for those still competing for business, said Greg Lewis, an analyst at Credit Suisse Group AG. “Can that strengthen rates? Absolutely,” said the New York-based analyst, whose recommendations on the shares of shipping companies returned 18 percent in the past six months. “With the improvement in crop cargoes, we may see a pick up.”
Hedge funds reduced bullish bets on commodities for a second consecutive week as the Federal Reserve signaled it may refrain from more monetary stimulus, increasing concern that growth will slow and curb demand for raw materials. Money managers lowered net-long positions across 18 U.S. futures and options by 2.8 percent to 1.1 million contracts in the week ended April 3, data from the Commodity Futures Trading Commission show. Bets on higher corn prices fell to the lowest since February, while those on hogs dropped by the most since May. Speculators cut wagers on costlier crude oil for a third week, and are now the least bullish in two months. Minutes from the March 13 Fed policy meeting released April 3 showed policy makers will probably hold off on increasing monetary accommodation unless the U.S. economic expansion falters.
The Standard & Poor’s GSCI gauge of 24 commodities rose more than 80 percent from December 2008 to June 2011 as the central bank set rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. The U.S. economy will accelerate this quarter and the next, economist estimates compiled by Bloomberg show. “The market is addicted to stimulus,” said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management who helps oversee $1 billion of assets. “This market has risen because of the liquidity push and the market will decline when it’s deprived of liquidity.”
GRAINS-US soy at 7-month top on exports; corn, wheat rise (Source: CME)
By Thomson Reuters - Mon 09 Apr 2012 11:36:10 CT
Chicago soy climbed to its highest in more than seven months rising for a third straight session as strong U.S. exports and shrinking South American supplies buoyed the market. "U.S. export sales report showed that there is strong demand for not just soybeans but also grains," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
GRAINS-US soy at 7-month top on exports; corn, wheat rise
SINGAPORE, April 9 (Reuters) - Chicago soy climbed to its highest in more than seven months rising for a third straight session as strong U.S. exports and shrinking South American supplies buoyed the market.
"U.S. export sales report showed that there is strong demand for not just soybeans but also grains," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
Bulgaria expects lower 2012 grains crop
SOFIA, April 6 (Reuters) - Bulgaria's wheat and barley crops are likely to be lower than a year ago after dry weather in autumn and cold snaps in the winter hit sowings, a senior agriculture official said on Friday.
The Balkan country reaped 4.3 million tonnes of wheat in 2011 and 670,000 tonnes of barley, a huge part of which was exported, mainly to Spain.
Iran set to buy more grain; poor crop fuels stockpiling
LONDON/HAMBURG, April 5 (Reuters) - Iran is at risk of a poor grain crop which could force it to look for more wheat imports in coming months as Western sanctions already disrupt its food imports, traders said on Thursday.
Iran bought wheat on international markets at a frantic pace in March, ordering a large part of its expected yearly requirement in a little over one month.
Drought hits 4 mln ha of China's crops -Xinhua
BEIJING, April 5 (Reuters) - About 4 million hectares of crops are suffering from a severe drought in China that has hit 13 provinces including the major farming province of Sichuan in southwest China, state news agency Xinhua said.
The drought has left 7.8 million people and 4.6 million livestock without adequate drinking water in provinces including Yunnan, Hebei, Shanxi and Gansu as of Thursday, Xinhua said.
Corn - Old-crop corn futures settled low-range with losses of 9 1/4 and 11 cents in the May and July contracts, respectively. Deferred futures were steady to 3 1/2 cents lower which was a mid-range close. Focus today was on readying positions for tomorrow’s Supply & Demand Report, with the predominant action being bull spread unwinding. Traders expect the report to show tight old-crop supplies of 717 million bu., but recent USDA report surprises have made them unwilling to "bet" heavily on pre-report expectations. (Source: CME)
Corn Market Recap for 4/9/2012 (Source: CME)
Mon 09 Apr 2012 14:18:00 CT
May Corn finished down 9 1/4 at 649, 15 1/4 off the high and 1/2 up from the low. July Corn closed down 11 at 641 1/4. This was equal to the low and 16 1/4 off the high. May corn opened 1/4 cent lower from the close posted last Thursday but eventually corn managed a sharp range down move on the charts. It is possible that the reversal in November soybeans provided some additive pressure to corn today. Many traders think that corn was seeing fresh pressure from changing views toward the upcoming report, while others think the lack of a distinct frost impact might have caused some of the selling today, as the market at times last week was pricing in the prospect of some frost damage. With a hard range down move in US equities today and with US grain inspections for corn this morning of only 22.364 million bushels this morning (off expectations of 28 to 32 million bushels) the inspections news might have been considered a little bearish toward corn prices today. While some analysts think that US corn stocks might be reduced in the USDA report Tuesday, that theory might have been mostly factored into corn prices with the rallies between March 29th and April 3rd. It is also possible that the corn trade was factoring in a record pace of US corn plantings as that report was due out after the Tuesday US trade window. May Rice finished down 0.17 at 14.875, 0.025 off the high and 0.075 up from the low.
Wheat - Futures closed mostly 3 to 4 cents higher in Chicago, narrowly mixed in Kansas City and fractionally to 2 cents higher in most Minneapolis contracts. That was good for a mid-range close in Chicago and Minneapolis, while Kansas City futures ended low-range. Wheat futures were lightly supported by mild short-covering ahead of USDA's Supply & Demand Report Tuesday morning. Traders are anticipating a downtick in the old-crop carryover projection, but supplies are abundant domestically and globally, which will keep the wheat market from leading a price rally even if USDA lowers its carryover peg. (Source: CME)
Wheat Market Recap Report (Source: CME)
Mon 09 Apr 2012 14:18:01 CT
May Wheat finished up 4 1/2 at 643, 6 off the high and 6 1/2 up from the low. July Wheat closed up 2 3/4 at 649. This was 4 3/4 up from the low and 6 1/4 off the high. May wheat opened higher on the session and generally managed to remain in positive ground throughout the US trade. The market seemed to get an early bounce on short covering off ongoing fears of cold weather and perhaps from position squaring ahead of the Tuesday USDA report. However, the wheat market quickly traded back toward the near the lows of the day, as the fear of cold declined and outside market forces stepped and weighed on a number of physical commodity markets like wheat. Weekly USDA wheat export inspections, released 1/2 hour after the open, came in at 17.605 million bushels, which was about as expected. Inspections for the previous week were revised up from 15.391 million to 15.835 million. May Oats closed up 1 1/4 at 338 1/4. This was 2 up from the low and 3 3/4 off the high.
Indonesia 11/12 cotton imports seen down
April 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"International cotton price volatility throughout calendar year 2011 severely impacted Indonesian cotton spinners' capacity to import. For marketing year 2011/12, Post expects that Indonesian cotton imports will decline to 1.8 million bales, compared to 2.1 million bales in MY 2010/11. In MY 2011/12, the market share for U.S. cotton in Indonesia is also estimated to decline, primarily due to strong competition from Australia."
Egypt cotton area seen down 30 pct
"Post forecasts total area planted in 2012/2013 to decrease by 30 percent to 154,000 hectares versus 220,000 hectares in 2011/2012. Farmers are reluctant to grow cotton after many were unable to sell their 2011/2012 production in a timely manner and at a high enough price. Production of lint cotton is forecast to decrease by 27 percent at 550,000 bales versus 745,000 bales in 2011/2012.
Total domestic consumption is forecast at 630,000 bales compared to 535,000 bales in 2011/2012. Imports are forecast to increase to 560,000 bales versus 200,000 bales in 2011/2012 season. Imports in 2011/12 were impacted by the ban on cotton imports from October 2011 through March 2012. Exports are forecast to increase to 440,000 bales versus 400,000 bales during the 2011/2012 season."
Thailand 11/12 cotton imports seen down
"MY2011/12 cotton imports will likely decline 20-30 percent from the previous year to 1.3 million bales in anticipation of a global economic slowdown. In addition, the widespread flooding in the last quarter of 2011 affected the textile industry, particularly spinners, as many companies closed down their facilities. However, a recovery is expected in MY2012/13 which will increase import demand by 20-30 percent to 1.6 million bales from MY2011/12."
Cotton - Futures staged an upside day of trade and settled mid-range with gains ranging from 62 to 144 points. Cotton futures received a boost from news India’s trade minister said the country will not issue new cotton export permits, at least until the completion of an examination of last month’s export permits to see if cotton was being stockpiled elsewhere -- namely China. As India is the world’s second largest cotton producer, this opens the door to more export demand for U.S. cotton. (Source: CME)
Uganda coffee exports below target in March - UCDA
KAMPALA, April 5 (Reuters) - Uganda exported a below-target 187,595 60-kg bags of coffee in March compared with 223,099 bags a year earlier as the harvest drew to an end, a source at the state-run Uganda Coffee Development Authority (UCDA) said on Thursday.
"We had anticipated this decline. The main reason is that the major harvest in east and central regions is tailing off so yields are low," the industry source said.
Brent slips below $123 on Iran talks, US jobs data
SINGAPORE, April 9 (Reuters) - Brent crude futures slipped $1 after Iran agreed to resume talks on its nuclear programme, easing fears of a supply disruption in the Middle East.
"The impending talks on Iran's nuclear programme are a step in the right direction, but this issue will continue to set a high floor on oil prices," said Victor Shum, senior partner at oil consultancy Purvin & Gertz.
Iraq says OPEC seeking world oil price balance
BAGHDAD, April 9 (Reuters) - OPEC is seeking a balance in world oil prices, but political instability rather than production issues are affecting the market price, Iraqi Oil Minister Abdul Kareem Luaibi said on Monday.
Brent crude slipped around $1 on Monday after Iran agreed to resume talks on its disputed nuclear programme, easing fears over a supply disruption, and prices were under pressure on demand growth concerns.
Saudi to supply full May crude to Asia -source
TOKYO, April 9 (Reuters) - Saudi Arabia, the world's top crude exporter, will supply full contracted volumes of crude oil in May to at least one Asian term buyer, unchanged from April, an industry source familiar with the matter said on Monday.
Saudi Arabia made no changes to the operational tolerance in the supply allocation, the source added, meaning buyers have the option of asking for cargoes to be loaded with up to 10 percent more or less crude than contracted.
China ship insurer deals new blow to Iran oil exports
SINGAPORE, April 5 (Reuters) - A major Chinese ship insurer will halt cover for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC's second largest producer, two officials from the insurance provider told Reuters on Thursday.
This is the first sign that refiners in China, Iran's top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran's other top customers -- India, Japan and South Korea -- are running into similar problems, raising questions on how Tehran will be able to continue to export the bulk of its oil.
In Iraq, oil majors play north versus south
April 5 (Reuters) - In the weeks before Iraqi Kurdistan revealed that Exxon Mobil had signed up to explore for oil there, executives at rival Shell faced a dilemma over whether or not to join the U.S. oil major in its foray north and risk angering Baghdad.
The fields in the autonomous region offered rich potential, an easier working environment, better security and attractive contracts. That seemed a winning combination for smaller oil companies already working there, such as Norway's DNO even though they struggled to collect profits.
Oil Trades Near One-Week Low Amid Forecast Stockpile Gain (Source: Bloomberg)
Oil traded near the lowest price in almost a week in New York on speculation U.S. crude stockpiles rose to the highest level for this time of year since 1990. Futures were little changed after falling 0.8 percent yesterday as U.S. March employment data showed fewer jobs were added than the lowest forecast in a Bloomberg News survey of economists. Crude inventories probably increased 2 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow. Oil has climbed this year on concern that tension with Iran will disrupt global supplies. “There is some risk to the demand-growth scenario at a time when oil prices are high and have quite a large premium built into them,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The outlook could be for some further weakness if we start to see statistics on the demand side confirming these possible early warning signs.”
Oil for May delivery was at $102.55 a barrel, up 9 cents, in electronic trading on the New York Mercantile Exchange at 11:27 a.m. Sydney time. The contract yesterday declined 85 cents to $102.46, the lowest close since April 4. Prices are up 3.8 percent this year.
Alcoa Sees Aluminum Cuts as Production Gains: Commodities (Source: Bloomberg)
Alcoa Inc. (AA) Chief Executive Officer Klaus Kleinfeld said in January China’s aluminum industry would cut 1.1 million metric tons of unprofitable capacity “pretty soon.” So far that prediction isn’t close to coming true. China’s aluminum industry, the world’s largest, saw output rise 18 percent in the first two months of the year, according to International Aluminum Association data. That’s helped to boost global supplies and create a surplus of the metal while curbing prices, which are down 22 percent from a year ago. Declining prices and rising energy costs have eroded smelting margins, prompting New York-based Alcoa and its Norwegian competitor Norsk Hydro ASA (NHY) to announce 771,000 metric tons of capacity cuts this year. China’s smelters are avoiding that fate because they don’t appear to be paying market rates for power, said Ken Hoffman, an analyst at Bloomberg Industries.
Chinese plants owned by local governments are resisting closures in order to preserve jobs, said Lloyd O’Carroll, an analyst at Davenport & Co. “If production is not economic, at some point it will be shut down,” O’Carroll, who is based in Richmond, Virginia, said in an interview. “The question is how long will it take.”
Ship Rates Seen Rising Most Since 2009 as Owners Anchor (Source: Bloomberg)
Ship owners are anchoring the most commodity carriers since at least 2008 after the biggest slump in rates for more than a decade, cutting capacity just as Brazilian farmers prepare for record soybean exports. More than 25 percent of the Panamax fleet was anchored last month, the most in data compiled by Bloomberg since 2008. Daily rates for the 750-foot-long vessels will average $10,000 this quarter, 25 percent more than in the first three months and the biggest increase in more than two years, the median of nine analyst estimates shows. Shares of Athens-based Safe Bulkers (SB) Inc., which owns 18 Panamaxes, will rise 35 percent in 12 months, according to the average of seven predictions.
Rates have been below the $13,000 owners need to break even every day this year, spurring more idling. The slump reflects a glut of capacity rather than less trade, with Clarkson Plc, the biggest shipbroker, forecasting record volume in 2012. Owners with fleets of 20 vessels or more may keep anchoring some ships to boost rates for those still competing for business, said Greg Lewis, an analyst at Credit Suisse Group AG. “Can that strengthen rates? Absolutely,” said the New York-based analyst, whose recommendations on the shares of shipping companies returned 18 percent in the past six months. “With the improvement in crop cargoes, we may see a pick up.”
20120410 1056 Soy Oil & Palm Oil Related News.
SGS CPO export up 8.9% to 488,758 tonnes for the period of 1~10 Apr 2012.
ITS CPO export up 7.8% to 478,948 tonnes for the period of 1~10 Apr 2012.
MPOB Official Data for the month of Mar 2012 vs Feb 2012
Exports up 10.84% to 1,342,650 tonnes
Stocks down 5% to 1,959,240 tonnes
Output up 2.13% to 1,211,244 tonnes
Soybeans - Futures closed 1 1/2 to 3 1/4 cents lower in the May through September contracts. New-crop futures finished mixed, with the November contract 1/2 cent higher. Soybean traders were focused on evening positions ahead of tomorrow morning's Supply & Demand Report from USDA. That kept price action choppy with a downside bias throughout much of the session as traders put some profits in the bank. But selling interest was limited as traders expect USDA to lower its old-crop carryover projection by 29 million bu., based on the average guess. (Source: CME)
Soybean Complex Market Recap (Source: CME)
Mon 09 Apr 2012 14:18:01 CT
May Soybeans finished down 3 at 1431, 15 3/4 off the high and 7 1/2 up from the low. July Soybeans closed down 3 at 1434 3/4. This was 6 1/2 up from the low and 16 1/4 off the high. May Soymeal closed down 3.1 at 388.8. This was 1.5 up from the low and 6.9 off the high. May Soybean Oil finished up 0.07 at 56.71, 0.47 off the high and 0.23 up from the low. After making a minor new high for the move early today, the May soybean market fell back in what many suggested was a profit taking or position balancing reaction ahead of the coming USDA report. The November soybeans forged an even wider range today, suggesting that the difference in opinion between old and new crop soybean markets remains rather significant. US soybean export inspections were seen at 26.39 million bushels from 29.5 million last week and that compares to estimates of 24 to 28 million. Perhaps the soybean market was also seeing some pressure from the prospect of precipitation in the southern US for later this week. As in other physical commodity markets, weakness in equities and adverse currency market action could have been an excuse to bank some long profits in soybeans ahead of a critical junction on Tuesday. While USDA report later in the year might take on more importance than the Tuesday report, the markets are still on edge because of the fear of tightening balance sheets.
As Supply Dwindles, Surging Soybean Market Poised to Steal Spotlight from King Corn (Source: CME)
Mon Apr 09 11:51:00 CDT 2012 CT
More Upside Price Potential for Soybeans
For over a year, corn has reigned as unofficial king of agricultural commodity futures markets, dominating headlines and drawing a flood of speculator money amid record-high prices and concern over dwindling global supplies. More recently, soybeans, the second biggest and most valuable U.S. crop after corn, appear poised to grab the spotlight as another growing season gets underway. Soybean futures traded on CME Group have surged nearly 30 percent since mid-December, reflecting hot and dry weather that hurt crops in Argentina and Brazil. Corn futures rose about 14 percent during that period.
VEGOILS-Palm oil hits new 13-month top on lower stocks view
SINGAPORE, April 9 (Reuters) - Malaysian palm oil futures rose to a fresh 13-month high buoyed by expectations of lower stocks that come as demand shifts away from tightening South American soyoil supply.
"The market's reflective of tomorrow's series of data release. It's buying hype while technical is also bullish," said a dealer with a foreign commodities brokerage in Malaysia.
South Africa soybean area seen up 6 pct
April 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South Africa: "With the increase in local demand for soybeans due to the building of new crushing plants, post expects that the area to be planted with soybeans in the 2012/13 MY will increase by 6 percent to 500,000 hectares, which could produce a soybean crop of 835,000 tonnes - 22 percent more than in the 2011/12 MY.
Although unfavorable weather conditions impacted negatively all the summer rainfall crops, soybean production for the 2011/12 MY is expected to be at the same level as the previous season due to an increase in plantings. With an increase in crushing capacity, it is expected that South Africa will crush a record 400,000 tonnes of soybean in the 2011/12 MY, and will almost double that to 750,000 tonnes in the 2012/13 MY.
Philippines soybean meal imports to fall
April 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in the Philippines:
"The Philippines was the 3rd largest market for U.S. soybean meal and the world's largest coconut oil exporter in both 2010 and 2011. Continued economic growth and an expanding middle class drove imports of SBM to 1.72 million tonnes in 2011. Though consumption will likely continue growing modestly, imports in 2012 are expected to slightly decline to 1.6 million tonnes due to adequate stocks, before increasing to 1.7 million tonnes in 2013."
Malaysia's March palm stocks likely fell to 7-month low
SINGAPORE, April 6 (Reuters) - Malaysia's March palm oil stocks probably fell to a 7-month low in March, as an increase in exports outpaced production growth, a Reuters survey showed on Friday.
Stocks may have dropped 3.5 percent to 1.99 million tonnes in March -- the lowest since August 2011 -- as stronger demand from Europe eats in stocks, a median survey of five plantation houses showed.
ITS CPO export up 7.8% to 478,948 tonnes for the period of 1~10 Apr 2012.
MPOB Official Data for the month of Mar 2012 vs Feb 2012
Exports up 10.84% to 1,342,650 tonnes
Stocks down 5% to 1,959,240 tonnes
Output up 2.13% to 1,211,244 tonnes
Soybeans - Futures closed 1 1/2 to 3 1/4 cents lower in the May through September contracts. New-crop futures finished mixed, with the November contract 1/2 cent higher. Soybean traders were focused on evening positions ahead of tomorrow morning's Supply & Demand Report from USDA. That kept price action choppy with a downside bias throughout much of the session as traders put some profits in the bank. But selling interest was limited as traders expect USDA to lower its old-crop carryover projection by 29 million bu., based on the average guess. (Source: CME)
Soybean Complex Market Recap (Source: CME)
Mon 09 Apr 2012 14:18:01 CT
May Soybeans finished down 3 at 1431, 15 3/4 off the high and 7 1/2 up from the low. July Soybeans closed down 3 at 1434 3/4. This was 6 1/2 up from the low and 16 1/4 off the high. May Soymeal closed down 3.1 at 388.8. This was 1.5 up from the low and 6.9 off the high. May Soybean Oil finished up 0.07 at 56.71, 0.47 off the high and 0.23 up from the low. After making a minor new high for the move early today, the May soybean market fell back in what many suggested was a profit taking or position balancing reaction ahead of the coming USDA report. The November soybeans forged an even wider range today, suggesting that the difference in opinion between old and new crop soybean markets remains rather significant. US soybean export inspections were seen at 26.39 million bushels from 29.5 million last week and that compares to estimates of 24 to 28 million. Perhaps the soybean market was also seeing some pressure from the prospect of precipitation in the southern US for later this week. As in other physical commodity markets, weakness in equities and adverse currency market action could have been an excuse to bank some long profits in soybeans ahead of a critical junction on Tuesday. While USDA report later in the year might take on more importance than the Tuesday report, the markets are still on edge because of the fear of tightening balance sheets.
As Supply Dwindles, Surging Soybean Market Poised to Steal Spotlight from King Corn (Source: CME)
Mon Apr 09 11:51:00 CDT 2012 CT
More Upside Price Potential for Soybeans
For over a year, corn has reigned as unofficial king of agricultural commodity futures markets, dominating headlines and drawing a flood of speculator money amid record-high prices and concern over dwindling global supplies. More recently, soybeans, the second biggest and most valuable U.S. crop after corn, appear poised to grab the spotlight as another growing season gets underway. Soybean futures traded on CME Group have surged nearly 30 percent since mid-December, reflecting hot and dry weather that hurt crops in Argentina and Brazil. Corn futures rose about 14 percent during that period.
VEGOILS-Palm oil hits new 13-month top on lower stocks view
SINGAPORE, April 9 (Reuters) - Malaysian palm oil futures rose to a fresh 13-month high buoyed by expectations of lower stocks that come as demand shifts away from tightening South American soyoil supply.
"The market's reflective of tomorrow's series of data release. It's buying hype while technical is also bullish," said a dealer with a foreign commodities brokerage in Malaysia.
South Africa soybean area seen up 6 pct
April 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South Africa: "With the increase in local demand for soybeans due to the building of new crushing plants, post expects that the area to be planted with soybeans in the 2012/13 MY will increase by 6 percent to 500,000 hectares, which could produce a soybean crop of 835,000 tonnes - 22 percent more than in the 2011/12 MY.
Although unfavorable weather conditions impacted negatively all the summer rainfall crops, soybean production for the 2011/12 MY is expected to be at the same level as the previous season due to an increase in plantings. With an increase in crushing capacity, it is expected that South Africa will crush a record 400,000 tonnes of soybean in the 2011/12 MY, and will almost double that to 750,000 tonnes in the 2012/13 MY.
Philippines soybean meal imports to fall
April 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in the Philippines:
"The Philippines was the 3rd largest market for U.S. soybean meal and the world's largest coconut oil exporter in both 2010 and 2011. Continued economic growth and an expanding middle class drove imports of SBM to 1.72 million tonnes in 2011. Though consumption will likely continue growing modestly, imports in 2012 are expected to slightly decline to 1.6 million tonnes due to adequate stocks, before increasing to 1.7 million tonnes in 2013."
Malaysia's March palm stocks likely fell to 7-month low
SINGAPORE, April 6 (Reuters) - Malaysia's March palm oil stocks probably fell to a 7-month low in March, as an increase in exports outpaced production growth, a Reuters survey showed on Friday.
Stocks may have dropped 3.5 percent to 1.99 million tonnes in March -- the lowest since August 2011 -- as stronger demand from Europe eats in stocks, a median survey of five plantation houses showed.
Monday, April 9, 2012
20120409 1813 FCPO EOD Daily Chart Study.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : turned downward, buyer taking profit.
Support : 3550, 3500, 3470, 3450 level.
Resistance : 3620, 3650, 3700, 3720 level.
Comment :
FCPO closed lower with improved volume transacted. Soy oil price currently trading little higher while crude oil price diving lower.
Price opened little higher and surge upwards hitting new 13 month high followed by profit taking activities pressed price to closed at the low of the day reducing exposure ahead of tomorrow MPOB and surveyor export data.
Daily chart revised to suggesting a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.
20120409 1756 FKLI EOD Daily Chart Study.
Bollinger band reading : pullback correction little upside biased.
MACD Histogram : falling lower, buyer leaving as seller testing market.
Support : 1580, 1570, 1565, 1550 level.
Resistance : 1590, 1595, 1600, 1610 level.
Comment :
FKLI closed recorded loss with better volume changed hand doing 5 points discount compare to cash market that ended lower. Last Friday U.S. markets closed for Good Friday and today Asia markets ended in negative territory while European markets still closed for holiday.
Slower than estimated U.S. jobs growth and China recorded faster than expected inflation lead markets to trade lower while investors awaits U.S. 1st quarter corporates earning reports.
Technical chart study adjusted to recommending a pullback correction little upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.
20120409 1730 Regional Markets EOD Daily Chart Study.
DJIA chart reading : correction range bound.
Hang Seng chart reading : correction range bound little downside biased.
KLCI chart reading : pullback correction upside biased with MACD indicator crossed down.
20120409 1217 Local & Global Economy Related News.
Bank Negara Malaysia’s (BNM) international reserves amounted to RM416.1bn (US$135.7bn) as at 31 Mar, up from RM427bn (US$134.8bn) as at 15 Mar. The reserves were sufficient to finance 9.4 months of retained imports and was four times the short-term external debt. (BNM)
Car sales in Indonesia increased by 10.6% yoy in 1Q12 to 249,589 units on the back of strong consumer purchasing power, a senior official from the Indonesian Automotive Industry Association said. (Jakarta Globe)
The China Banking Regulatory Commission is preparing a new round of checks on bank charges after 12 banks failed to publicize their service fees as required by the end of Mar. (People’s Daily)
China's big four state banks extended almost Rmb300bn (US$47.5bn) in new local-currency loans last month, the official Securities Times reported, citing unidentified sources. (Reuters)
Vietnam's central bank will reduce the deposit rate cap to 12% from 13%, in line with its target to bring the ceiling to 10% by year-end to ease burdens on businesses. (Reuters)
Vietnamese inflation expectations have come down sharply given a drastic slowdown in the CPI growth in 1Q12 against Dec 2011, said Ministry of Industry and Trade’s Domestic Market Department head Vo Van Quyen. (The Saigon Times)
Vietnam’s General Statistics Office reported that due to the property-market slump, unsold stocks in the construction materials industry have increased by 21% this year. (Vietnam News)
Thailand’s Real Estate Broker Association has revealed that prices of pre-owned houses have dropped by 10-30%, as supplies surge after the flood. (Thai Financial Post)
Thailand’s Cabinet is expected tomorrow to approve THB20bn for pay hikes to ensure fairness for existing civil servants after the starting salary for new hires was hiked to THB15,000 in Jan. (The Nation)
Japan and China will seek to coordinate on supporting the IMF’s effort to contain Europe’s debt crisis, Japanese Finance Minister Jun Azumi said. (Bloomberg)
Japan's index of coincident economic indicators rose in Feb to 96.6 from 94.5 in Jan, the fourth straight month of increase. Economists expected a reading of 95.8. (RTTNews)
Japan: Bank of Japan seen adding stimulus on nominee rejection
The Bank of Japan may expand stimulus this month after law makers escalated pressure for extra action by blocking a candidate for the bank’s board and renewing calls for a more “proactive” monetary policy. Parliament’s upper house rejected economist Ryutaro Kono, described as holding similar views to Governor Masaaki Shirakawa, who says that monetary policy alone cannot solve deflation. The central bank may stand pat at a two-day meeting ending 10 April, preserving ammunition for later in the month, when price projections will show a goal of 1% inflation is not in sight. (Bloomberg)
Canada: Jobs grow most since 2008 as firms add full timers
Canada added the most jobs since September 2008 last month, a gain dominated by full-time positions that revived what had been a stalling labor market in the world’s 10th largest economy. Employment rose by 82,300 following a decline of 2,800 in February, lowering the jobless rate to 7.2% from 7.4%.Employment growth should add to household spending that the Bank of Canada said last month has been rising faster than expected. Full-time employment in Canada jumped by 70,000 in March while part-time positions grew by 12,400. About 42,600 jobs were created by private companies and 20,900 in the public sector. Average hourly earnings of permanent employees rose 2.5% in March y-o-y, faster than last month’s 2.1%. (Bloomberg)
US: Employment increase in US trails most-pessimistic forecasts
Hiring by American employers trailed the most pessimistic forecasts in March, casting doubt on the strength of the expansion now in its third year. The 120,000 increase in payrolls was the smallest in five months. The data also showed the unemployment rate fell to 8.2% as people left the labor force, while workers put in fewer hours. The figures followed an average 246,000 increase in payrolls in the previous three months. Estimates ranged from increases of 175,000 to 250,000. The March data showed a 34,000 decrease in retail employment. February data, meanwhile, rose a revised 240,000. Employment at service providers increased 89,000 last month, less than half the 211,000 gain in February. Professional and business service payrolls rose 31,000 last month, restrained by a 7,500 drop in temporary hiring. Manufacturing was among the few industries that added more jobs than in February, with a 37,000 increase. (Bloomberg)
US: Jobless claims fell to lowest level in four years
Claims for US unemployment benefits dropped last week to the lowest level in four years. Jobless claims fell 6,000 to 357,000 in the week ended 31 March, the fewest since April 2008. The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6%. 26 states and territories reported a decline in claims, while 27 reported an increase. (Bloomberg)
US: Consumer credit rose less than forecast in February
US consumer borrowing rose less than forecast in February, restrained by a drop in credit-card debt. Credit increased USD8.7bn, the least in four months, after a revised USD18.6bn gain in January that was more than initially estimated. Smaller gains in borrowing indicate American households are continuing to pay down debt or are less optimistic about their finances. The Fed’s statistics showed revolving debt, which comprises credit cards, fell USD2.2bn in February after a USD3bn drop a month earlier. Non-revolving debt, including educational loans and borrowing for autos and mobile homes, climbed by USD10.9bn in February, the smallest gain in four months. (Bloomberg)
Car sales in Indonesia increased by 10.6% yoy in 1Q12 to 249,589 units on the back of strong consumer purchasing power, a senior official from the Indonesian Automotive Industry Association said. (Jakarta Globe)
The China Banking Regulatory Commission is preparing a new round of checks on bank charges after 12 banks failed to publicize their service fees as required by the end of Mar. (People’s Daily)
China's big four state banks extended almost Rmb300bn (US$47.5bn) in new local-currency loans last month, the official Securities Times reported, citing unidentified sources. (Reuters)
Vietnam's central bank will reduce the deposit rate cap to 12% from 13%, in line with its target to bring the ceiling to 10% by year-end to ease burdens on businesses. (Reuters)
Vietnamese inflation expectations have come down sharply given a drastic slowdown in the CPI growth in 1Q12 against Dec 2011, said Ministry of Industry and Trade’s Domestic Market Department head Vo Van Quyen. (The Saigon Times)
Vietnam’s General Statistics Office reported that due to the property-market slump, unsold stocks in the construction materials industry have increased by 21% this year. (Vietnam News)
Thailand’s Real Estate Broker Association has revealed that prices of pre-owned houses have dropped by 10-30%, as supplies surge after the flood. (Thai Financial Post)
Thailand’s Cabinet is expected tomorrow to approve THB20bn for pay hikes to ensure fairness for existing civil servants after the starting salary for new hires was hiked to THB15,000 in Jan. (The Nation)
Japan and China will seek to coordinate on supporting the IMF’s effort to contain Europe’s debt crisis, Japanese Finance Minister Jun Azumi said. (Bloomberg)
Japan's index of coincident economic indicators rose in Feb to 96.6 from 94.5 in Jan, the fourth straight month of increase. Economists expected a reading of 95.8. (RTTNews)
Japan: Bank of Japan seen adding stimulus on nominee rejection
The Bank of Japan may expand stimulus this month after law makers escalated pressure for extra action by blocking a candidate for the bank’s board and renewing calls for a more “proactive” monetary policy. Parliament’s upper house rejected economist Ryutaro Kono, described as holding similar views to Governor Masaaki Shirakawa, who says that monetary policy alone cannot solve deflation. The central bank may stand pat at a two-day meeting ending 10 April, preserving ammunition for later in the month, when price projections will show a goal of 1% inflation is not in sight. (Bloomberg)
Canada: Jobs grow most since 2008 as firms add full timers
Canada added the most jobs since September 2008 last month, a gain dominated by full-time positions that revived what had been a stalling labor market in the world’s 10th largest economy. Employment rose by 82,300 following a decline of 2,800 in February, lowering the jobless rate to 7.2% from 7.4%.Employment growth should add to household spending that the Bank of Canada said last month has been rising faster than expected. Full-time employment in Canada jumped by 70,000 in March while part-time positions grew by 12,400. About 42,600 jobs were created by private companies and 20,900 in the public sector. Average hourly earnings of permanent employees rose 2.5% in March y-o-y, faster than last month’s 2.1%. (Bloomberg)
US: Employment increase in US trails most-pessimistic forecasts
Hiring by American employers trailed the most pessimistic forecasts in March, casting doubt on the strength of the expansion now in its third year. The 120,000 increase in payrolls was the smallest in five months. The data also showed the unemployment rate fell to 8.2% as people left the labor force, while workers put in fewer hours. The figures followed an average 246,000 increase in payrolls in the previous three months. Estimates ranged from increases of 175,000 to 250,000. The March data showed a 34,000 decrease in retail employment. February data, meanwhile, rose a revised 240,000. Employment at service providers increased 89,000 last month, less than half the 211,000 gain in February. Professional and business service payrolls rose 31,000 last month, restrained by a 7,500 drop in temporary hiring. Manufacturing was among the few industries that added more jobs than in February, with a 37,000 increase. (Bloomberg)
US: Jobless claims fell to lowest level in four years
Claims for US unemployment benefits dropped last week to the lowest level in four years. Jobless claims fell 6,000 to 357,000 in the week ended 31 March, the fewest since April 2008. The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6%. 26 states and territories reported a decline in claims, while 27 reported an increase. (Bloomberg)
US: Consumer credit rose less than forecast in February
US consumer borrowing rose less than forecast in February, restrained by a drop in credit-card debt. Credit increased USD8.7bn, the least in four months, after a revised USD18.6bn gain in January that was more than initially estimated. Smaller gains in borrowing indicate American households are continuing to pay down debt or are less optimistic about their finances. The Fed’s statistics showed revolving debt, which comprises credit cards, fell USD2.2bn in February after a USD3bn drop a month earlier. Non-revolving debt, including educational loans and borrowing for autos and mobile homes, climbed by USD10.9bn in February, the smallest gain in four months. (Bloomberg)
20120409 1215 Malaysia Corporate Related News.
Perodua drafting roadmap for used-car business
Second national car company Perusahaan Otomobil Kedua Sdn Bhd (Perodua) hopes to establish an organization structure for its used-car business by middle for the year, its chief said. The company is venturing into the used-car business to expand its revenue base and provide a platform for existing and new customers so that they can trade in their Perodua cars or other makes, for its new models. Perodua entered the used-car business in August 2008, but ceased operations more than a year later due to low sales volume. (BT)
Govt still keen on high-speed rail link
The Government is still keen on the high-speed rail project linking Kuala Lumpur and Singapore, the Land Public Transport Commission (SPAD) said. SPAD chief executive officer Mohd Nur Ismal Mohamed Kamal, however, stressed that it will depend on the outcome of a feasibility study, which started last month and is expected to be completed in 6 to 12 months’ time. (BT)
S P Setia enters Indonesia in regional expansion
S P Setia continues its regional expansion with the opening of a representative office in Jakarta, giving the developer a foothold in the archipelago. Jakarta is the fifth overseas destination the developer has ventured into after Vietnam, Singapore, Australia and China. S P Setia president and CEO Tan Sri Liew Kee Sin said S P Setia hopes to be able to directly source Indonesian arts and crafts, building materials and furniture for its projects in the future. (Financial Daily)
Rafique to join Maybank as new group CFO
Former chief financial officer (CFO) of the country’s utility company Tenaga Nasional Bhd (TNB), Mohamed Rafique Merican Mohd Wahiduddin Merican will join the country’s largest banking group, Malayan Banking Bhd (Maybank) as its group chief financial officer (CF) effective 1 Jun. In an exchange filing last Friday, Maybank said he will succeed Datuk Khairussaleh Ramli, 43, who stepped down from his position as the bank’s group CFO following his appointment as the president director of PT Bank Internasional Indonesia Tbk, a subsidiary of Maybank in Indonesia. (Malaysian Reserve)
Ekuinas targest 12% minimum return for its investments in education sector
Ekunas Nasional Bhd is looking at a time horizon of between three and five years for its investments in the education sector with a long-term minimum target internal rate of return of 12% per year, according to a spokesperson from the government-linked private equity fund management firm. Its aspirational target for the investments is at 20%. Ekuinas has recently completed a purchase of a 90% stake in Cosmopoint SB for RM246m and has been reportedly eyeing Masterskill Education Group Bhd and Help International Corp Bhd on its plans to create the country’s largest education group. (Malaysian Reserve)
MBSB extends home financing
Malaysia Building Society (MBSB) will start extending home financing facilities to the second generation of property purchasers for its housing project in Sepang, president and CEO Datuk Ahmad Zaini Othman said. The non-bank lender, which does not come under the purview of Bank Negara, said this special financing facility would allow home buyers to stretch monthly home-loan repayments to the kids (second generation) of these home buyers, most of whom are retirees in their 50’s. (StarBiz)
The listing of Felda Global Ventures Holdings (FGVH) on Bursa Malaysia will proceed despite the Kelantan government's refusal to hand over the land to Felda. Felda chairman Tan Sri Mohd Isa Samad said the situation would not affect the listing of FGVH as the land area involved is small compared to Felda land in other states. "Felda Plantations Sdn Bhd has developed land in states controlled by the opposition. It is up to them whether to join or not (listing of FGVH). "It will not stop the listing as we have done everything and states that are against the listing can't do anything about it," he said. (Bernama)
Sime Darby Property Bhd, which is the property arm of Sime Darby Bhd, plans to build the conglomerate's 11th township development north of its existing Denai Alam township in Selangor. Sime Darby Property head of property development Zulkifli Tahmali said the township is at its planning stage but will measure 404.8ha along the Guthrie Corridor Expressway, which also sites the Bukit Jelutong development. "The new township will be a mix of residential, commercial and industrial (development), but we have not finalised the gross development value yet," Zulkifli told reporters here last Thursday. He was updating reporters on Sime Darby's latest promotional property blitz under the Lifestylse Collection brand to sell its unsold properties located within the group's 10 townships. The company plans to launch eight more properties with a gross sales value of RM1.2bn, involving 1,800 units of residential, commercial and industrial property its by financial year ending June. "We are on track as we have sold RM1.2bn worth of properties since the one-month sales campaign started and we have another RM1.2bn worth to sell until June. (BT)
MRT PDP MMC-Gamuda JV plans to speed up the awarding of a majority of contracts to the start of 3Q12 from its original Oct-12 deadline, sources said. The source said about 80% of projects could be awarded for the civil, station and depot works months ahead of schedule. The PDP had initially guided for 85% of projects to be contracted out by Oct-2012. So far, 27 out of the 86 elevated packages had been awarded, bringing the total contract value to RM10.5bn. (Star)
Axiata Group Bhd has been chosen by Forbes to be part of its 2011 Forbes Fab 50 Asian best publicly-traded companies. Though only 4 years old after its separation fromTelekom Malaysia Bhd (TM) and Datuk Seri Jamaludin Ibrahim was handpicked for the job, Axiata has established a strong foothold in some of the fastest growing markets such as India, Indonesia, Sri Lanka and Bangladesh. Now there’s a new challenge – competition is stepping up in the data space segment as non-traditional competitors join in the race to steal market share via the internet. It also opens new avenues for content/application game and digital services. But that opportunity has come with a cost. Jamaludin admits that the traditional voice revenues are falling faster than the growth in data revenues and the challenge for companies like Axiata is the ability to get a “bigger share of the consumer's wallet”. This transition has caused Axiata to shift focus to offer services beyond connectivity and quickly monetise the surge in data by aggregating content/service and provide digital services to match the lifestyle needs of today's consumers. This will help counter pressure of margin drops in our voice/SMS revenues,'' Jamaludin says in an interview with StarBizWeek. He believes data will grow faster across the markets in which Axiata operates, led by high smartphone adoption, popularity of social media sites and the need of young population to remain connected but it is hard to predict for now if cellular growth with all that is happening will scale back to the double-digit range the industry had been accustomed to. He dismisses voice as increasingly fading and he says “in the short term it is still good, but not for the long term, and that is because there will be more substitution.” Jamaludin has identified 3 holistic strategies to tackle the challenge: 1) ability to ramp data for carriage revenue, 2) pushing for better customer experience from the network perspective and 3) bringing down cost. If these three are addressed, then whatever Axiata is doing will yield better margins, he said. (StarBiz)
Ingress Corp has received a letter of intent (LOI) from Tenaga Nasional for the establishment of a power management unit at the latter's Pantai Remis switching station. Ingress said the aggregate value of the project is RM26.6m. Work is slated to start by mid2012 and is expected to be completed in 609 days. (Malaysian Reserve)
The Selangor state government will submit a request to the Federal Government for a RM1bn allocation to build more retention ponds, MB Tan Sri Khalid Ibrahim said. Khalid said the proposal papers were ready but the matter would be discussed with state exco members before being submitted. “The proposal will explain why the allocation is necessary and what would happen if retention ponds and drains are not built." he said. (Star)
Embroiled in controversy, Silver Bird Group Bhd has proposed to remove group managing director Datuk Tan Han Kook and executive director Ching Siew Cheong at its upcoming annual general meeting at the end of this month. The company said it would also appoint Baker Tilly Monteiro Heng as auditors in place of retiring auditors Crowe Horwath. The company said that in the midst of ongoing efforts in formulating a regularisation plan, it would not be able to make the repayments to its respective financial institutions totalling about RM143.6m. (Starbiz)
Tambun Indah Land Bhd is undertaking five development projects in Penang with a combined gross development value (GDV) of around RM571m this year. The projects are the RM131m Pearl Indah, RM180m Pearl Residence 1 in Simpang Ampat, RM39m BM Residence in Bukit Mertajam, RM41m Carissa Villas in Bagan Lallang and RM180m Straits Garden in Jelutong on the island. Group MD Teh Kiak Seng said with the exception of the Straits Garden project in Jelutong that would be launched in the 3Q12, the construction for the other four projects had already started.(Starbiz)
The City International Hospital managed by Ireka Corp Bhd unit, Ireka Development Management Sdn Bhd, is slated to complete by the end-2012. “Along with economic growth, social healthcare is one of the major concerns in Vietnam. “Given the increasing demand for quality overseas medical treatment, the park will be the first integrated healthcare development in Vietnam which will provide a comprehensive healthcare environment from facilities, hi-tech medical equipment to professional medical staff,” said president Lai Voon Hon. The hospital is the first general hospital to be completed within the “Medical City” located in Vietnam's largest medical hub, the International Hi-Tech Healthcare Park. The hospital is developed by Hoa Lam-Shangri-La Healthcare Ltd Liability Company (HLS).Ireka's associate company, Aseana Properties Ltd, holds a majority stake in HLS. (Starbiz)
Scomi Engineering is hopeful that its bid for the monorail project in Chennai will succeed. “The Chennai tender is coming up. We hope to be shortlisted,” president Kanesan Velupillai said. If successful, it would be Scomi’s biggest ever monorail project. Scomi and its consortium partner, Larsen & Toubro, secured the RM1.85bn Mumbai monorail project in November 2008. (Star Biz)
Hai-O Marketing Sdn Bhd, the multi-level marketing unit of Hai-O Enterprise Bhd, plans to move aggressively abroad, notably in Asean countries, in two years, after establishing a firm footing in Malaysia. "We will focus our business in Malaysia for the next few years, most importantly to uplift our branding and create awareness. Once we have established a firm footing here, we will venture into the regional markets and subsequently the global markets," Hai-O Marketing general manager Teoh Nee Siang said. The company will initially tap into Asean countries such as Indonesia and Thailand, before expanding to China. It has so far entered the Indonesian market, albeit in a small way, said Teoh. "Hopefully, the Bamboo Salt distributorship will pave the way for us to capture a bigger share of the market there." (Sun)
SEGi: The ball in Hii’s court
Will SEG International Bhd (SEGi) founder and largest shareholder Datuk Seri Clement Hii cash out or will he not? He has said publicly that he would be staying on no matter what. There was speculation that he would be making an exit following the acquisition of a 27.8% stake in the company by Navis Capital Partners Ltd, a private equity (PE) firm, at the end of last month. Navis has been known to be not only an active investor but also one which prefers control. Hii, also the group managing director of the tertiary education provider, has been in discussion with Navis' founders on ways to work together now that the PE firm has become the second largest shareholder in the company. Hii, according to Bloomberg data, remains the largest shareholder with a 29.8% stake. (Source: The Star)
LBS Bina to finally exit China
Sources said LBS will ink a deal this week to dispose of its 50% stakes in two joint ventures in China, one involving a golf course and the other a proposed 197-acre property development in Zhuhai. LBS could still play the role of contractor in the property project following the divestment, the sources add. (Source: The Edge)
Invensys-led group tipped to win Ampang LRT job
Malaysia is expected to award a RM950 million contract for system works for the Ampang light rail transit (LRT) line extension project to a consortium led by the UK’s Invensys plc. Government sources said the contract is expected to be awarded within the next one month and will help strengthen bilateral trade ties between Kuala Lumpur and London. Invensys is a global engineering and information technology group. Its consortium partners are Balfour Beatty Rail Sdn Bhd, which is 70 per cent owned by the UK’s Balfour Beatty plc – an infrastructure giant with strong finances, and Ingress Corp Bhd. Engineering group Ingress, which posted a pretax profit of RM31.05 million in fiscal year 2011, also owns 30 per cent of Balfour Beatty Rail. (Source: Business Times)
Telekom Malaysia: RM2.5bn capex for this year
Telekom Malaysia Bhd (TM) has allocated some RM2.5bn capital expenditure this year to improve its network and services nationwide. According to CEO Datuk Seri Zamzamzairani Mohd Isa, the budget will also be used for new businesses. TM, which currently operates Unifi high speed broadband, is now looking at contents and applications. Zamzamzairani said the group is also considering cloud computing and business process outsourcing. Meanwhile, Zamzamraini said TM aims to hit the 400,000 customer base mark for Unifi this year. TM also plans to develop more information, technology and communication technology services for the small and medium entrepreneurs. For a start, he said TM has signed a partnership agreement with Microsoft for the Office 365 software to expand our cloud computing services. (Business Times)
Bumi Armada: Unit forms US-based subsidiary
Bumi Armada’s wholly owned unit Bumi Armada Offshore Holdings Ltd , has formed a wholly-owned subsidiary in the United States to be principally involved in the offshore oil and gas marine services. Bumi Armada said on Friday that the company known as Armada Blue had been formed on Apr 2, 2012 as a limited liability company in accordance with the laws of the State of Texas. (Financial Daily)
I-Bhd: To build condo, duplex houses in i-City
I-Berhad is set to build 348 condominium units and 20 duplex houses in the city of digital lights in Seksyen 7 here. Each residential unit in i-City starts from RM340,000. I-Berhad CEO Datuk Eu Hong Chew said the i-Residence project constituted 20 percent of the 29ha i-City development. Eu said i-City, dubbed the first lighscape tourism destination in Malaysia with state-of-the-art LED technology showcase, would also have a new attraction inspired by Clarke Quay, a riverside development in Singapore. He said it was in line with the state government's project to upgrade the 7-km Sungai Rasau that cuts across i-City. He added that this development was included in the estimated gross development value of RM1bn.(Bernama)
Perdana Petroleum: Ibrahim sues company
Former major shareholder of oil and gas services provider Petra Perdana, Tengku Datuk Ibrahim Petra Tengku Indra Petra is suing Perdana Petroleum, the Malaysian Communications and Multimedia Commission (MCMC) as well as 11 other individuals for exemplary damages of RM50m and to have an injunction against the parties for assessing and using an email account belonging to him. The writ of summons also sought general damages for trespass against the plaintiff’s property, costs and other reliefs. Furthermore, the writ is seeking a declaration from the MCMC that it is the multimedia regulator’s duty to accept and investigate the plaintiff’s complaint. Perdana Petroleum (formerly known as Petra Perdana) said in an announcement to the stock exchange that the company was in the process of appointing a solicitor for the necessary course of action. (StarBiz)
asiaEP: Boardroom tussle over – for now
The boardroom tussle at ACE Market-listed asiaEP Resources Bhd is over for now. The twomonth drama came to an end yesterday at an extraordinary general meeting (EGM), with most shareholders voting in favour to retain the existing board of directors, comprising asiaEP's co-founders Dr Tan Boon Nunt and Lee Suet Hong, as well as three other directors, namely Khor Chai Tian, Chu Kheh Wee and Lim Ghim Chai. Results showed that among the shareholders who turned up, at least 75% have voted in favour to retain the existing board of directors, while around 23% to 25% had voted for their removal. “After this long havoc' that lasted for the past two months, finally, most shareholders, seeing that we are the founding members of the company, have chosen to continue to give their support to the existing board of directors,” Dr Tan, who is also asiaEP's executive chairman and MD, told reporters. (StarBiz)
Second national car company Perusahaan Otomobil Kedua Sdn Bhd (Perodua) hopes to establish an organization structure for its used-car business by middle for the year, its chief said. The company is venturing into the used-car business to expand its revenue base and provide a platform for existing and new customers so that they can trade in their Perodua cars or other makes, for its new models. Perodua entered the used-car business in August 2008, but ceased operations more than a year later due to low sales volume. (BT)
Govt still keen on high-speed rail link
The Government is still keen on the high-speed rail project linking Kuala Lumpur and Singapore, the Land Public Transport Commission (SPAD) said. SPAD chief executive officer Mohd Nur Ismal Mohamed Kamal, however, stressed that it will depend on the outcome of a feasibility study, which started last month and is expected to be completed in 6 to 12 months’ time. (BT)
S P Setia enters Indonesia in regional expansion
S P Setia continues its regional expansion with the opening of a representative office in Jakarta, giving the developer a foothold in the archipelago. Jakarta is the fifth overseas destination the developer has ventured into after Vietnam, Singapore, Australia and China. S P Setia president and CEO Tan Sri Liew Kee Sin said S P Setia hopes to be able to directly source Indonesian arts and crafts, building materials and furniture for its projects in the future. (Financial Daily)
Rafique to join Maybank as new group CFO
Former chief financial officer (CFO) of the country’s utility company Tenaga Nasional Bhd (TNB), Mohamed Rafique Merican Mohd Wahiduddin Merican will join the country’s largest banking group, Malayan Banking Bhd (Maybank) as its group chief financial officer (CF) effective 1 Jun. In an exchange filing last Friday, Maybank said he will succeed Datuk Khairussaleh Ramli, 43, who stepped down from his position as the bank’s group CFO following his appointment as the president director of PT Bank Internasional Indonesia Tbk, a subsidiary of Maybank in Indonesia. (Malaysian Reserve)
Ekuinas targest 12% minimum return for its investments in education sector
Ekunas Nasional Bhd is looking at a time horizon of between three and five years for its investments in the education sector with a long-term minimum target internal rate of return of 12% per year, according to a spokesperson from the government-linked private equity fund management firm. Its aspirational target for the investments is at 20%. Ekuinas has recently completed a purchase of a 90% stake in Cosmopoint SB for RM246m and has been reportedly eyeing Masterskill Education Group Bhd and Help International Corp Bhd on its plans to create the country’s largest education group. (Malaysian Reserve)
MBSB extends home financing
Malaysia Building Society (MBSB) will start extending home financing facilities to the second generation of property purchasers for its housing project in Sepang, president and CEO Datuk Ahmad Zaini Othman said. The non-bank lender, which does not come under the purview of Bank Negara, said this special financing facility would allow home buyers to stretch monthly home-loan repayments to the kids (second generation) of these home buyers, most of whom are retirees in their 50’s. (StarBiz)
The listing of Felda Global Ventures Holdings (FGVH) on Bursa Malaysia will proceed despite the Kelantan government's refusal to hand over the land to Felda. Felda chairman Tan Sri Mohd Isa Samad said the situation would not affect the listing of FGVH as the land area involved is small compared to Felda land in other states. "Felda Plantations Sdn Bhd has developed land in states controlled by the opposition. It is up to them whether to join or not (listing of FGVH). "It will not stop the listing as we have done everything and states that are against the listing can't do anything about it," he said. (Bernama)
Sime Darby Property Bhd, which is the property arm of Sime Darby Bhd, plans to build the conglomerate's 11th township development north of its existing Denai Alam township in Selangor. Sime Darby Property head of property development Zulkifli Tahmali said the township is at its planning stage but will measure 404.8ha along the Guthrie Corridor Expressway, which also sites the Bukit Jelutong development. "The new township will be a mix of residential, commercial and industrial (development), but we have not finalised the gross development value yet," Zulkifli told reporters here last Thursday. He was updating reporters on Sime Darby's latest promotional property blitz under the Lifestylse Collection brand to sell its unsold properties located within the group's 10 townships. The company plans to launch eight more properties with a gross sales value of RM1.2bn, involving 1,800 units of residential, commercial and industrial property its by financial year ending June. "We are on track as we have sold RM1.2bn worth of properties since the one-month sales campaign started and we have another RM1.2bn worth to sell until June. (BT)
MRT PDP MMC-Gamuda JV plans to speed up the awarding of a majority of contracts to the start of 3Q12 from its original Oct-12 deadline, sources said. The source said about 80% of projects could be awarded for the civil, station and depot works months ahead of schedule. The PDP had initially guided for 85% of projects to be contracted out by Oct-2012. So far, 27 out of the 86 elevated packages had been awarded, bringing the total contract value to RM10.5bn. (Star)
Axiata Group Bhd has been chosen by Forbes to be part of its 2011 Forbes Fab 50 Asian best publicly-traded companies. Though only 4 years old after its separation fromTelekom Malaysia Bhd (TM) and Datuk Seri Jamaludin Ibrahim was handpicked for the job, Axiata has established a strong foothold in some of the fastest growing markets such as India, Indonesia, Sri Lanka and Bangladesh. Now there’s a new challenge – competition is stepping up in the data space segment as non-traditional competitors join in the race to steal market share via the internet. It also opens new avenues for content/application game and digital services. But that opportunity has come with a cost. Jamaludin admits that the traditional voice revenues are falling faster than the growth in data revenues and the challenge for companies like Axiata is the ability to get a “bigger share of the consumer's wallet”. This transition has caused Axiata to shift focus to offer services beyond connectivity and quickly monetise the surge in data by aggregating content/service and provide digital services to match the lifestyle needs of today's consumers. This will help counter pressure of margin drops in our voice/SMS revenues,'' Jamaludin says in an interview with StarBizWeek. He believes data will grow faster across the markets in which Axiata operates, led by high smartphone adoption, popularity of social media sites and the need of young population to remain connected but it is hard to predict for now if cellular growth with all that is happening will scale back to the double-digit range the industry had been accustomed to. He dismisses voice as increasingly fading and he says “in the short term it is still good, but not for the long term, and that is because there will be more substitution.” Jamaludin has identified 3 holistic strategies to tackle the challenge: 1) ability to ramp data for carriage revenue, 2) pushing for better customer experience from the network perspective and 3) bringing down cost. If these three are addressed, then whatever Axiata is doing will yield better margins, he said. (StarBiz)
Ingress Corp has received a letter of intent (LOI) from Tenaga Nasional for the establishment of a power management unit at the latter's Pantai Remis switching station. Ingress said the aggregate value of the project is RM26.6m. Work is slated to start by mid2012 and is expected to be completed in 609 days. (Malaysian Reserve)
The Selangor state government will submit a request to the Federal Government for a RM1bn allocation to build more retention ponds, MB Tan Sri Khalid Ibrahim said. Khalid said the proposal papers were ready but the matter would be discussed with state exco members before being submitted. “The proposal will explain why the allocation is necessary and what would happen if retention ponds and drains are not built." he said. (Star)
Embroiled in controversy, Silver Bird Group Bhd has proposed to remove group managing director Datuk Tan Han Kook and executive director Ching Siew Cheong at its upcoming annual general meeting at the end of this month. The company said it would also appoint Baker Tilly Monteiro Heng as auditors in place of retiring auditors Crowe Horwath. The company said that in the midst of ongoing efforts in formulating a regularisation plan, it would not be able to make the repayments to its respective financial institutions totalling about RM143.6m. (Starbiz)
Tambun Indah Land Bhd is undertaking five development projects in Penang with a combined gross development value (GDV) of around RM571m this year. The projects are the RM131m Pearl Indah, RM180m Pearl Residence 1 in Simpang Ampat, RM39m BM Residence in Bukit Mertajam, RM41m Carissa Villas in Bagan Lallang and RM180m Straits Garden in Jelutong on the island. Group MD Teh Kiak Seng said with the exception of the Straits Garden project in Jelutong that would be launched in the 3Q12, the construction for the other four projects had already started.(Starbiz)
The City International Hospital managed by Ireka Corp Bhd unit, Ireka Development Management Sdn Bhd, is slated to complete by the end-2012. “Along with economic growth, social healthcare is one of the major concerns in Vietnam. “Given the increasing demand for quality overseas medical treatment, the park will be the first integrated healthcare development in Vietnam which will provide a comprehensive healthcare environment from facilities, hi-tech medical equipment to professional medical staff,” said president Lai Voon Hon. The hospital is the first general hospital to be completed within the “Medical City” located in Vietnam's largest medical hub, the International Hi-Tech Healthcare Park. The hospital is developed by Hoa Lam-Shangri-La Healthcare Ltd Liability Company (HLS).Ireka's associate company, Aseana Properties Ltd, holds a majority stake in HLS. (Starbiz)
Scomi Engineering is hopeful that its bid for the monorail project in Chennai will succeed. “The Chennai tender is coming up. We hope to be shortlisted,” president Kanesan Velupillai said. If successful, it would be Scomi’s biggest ever monorail project. Scomi and its consortium partner, Larsen & Toubro, secured the RM1.85bn Mumbai monorail project in November 2008. (Star Biz)
Hai-O Marketing Sdn Bhd, the multi-level marketing unit of Hai-O Enterprise Bhd, plans to move aggressively abroad, notably in Asean countries, in two years, after establishing a firm footing in Malaysia. "We will focus our business in Malaysia for the next few years, most importantly to uplift our branding and create awareness. Once we have established a firm footing here, we will venture into the regional markets and subsequently the global markets," Hai-O Marketing general manager Teoh Nee Siang said. The company will initially tap into Asean countries such as Indonesia and Thailand, before expanding to China. It has so far entered the Indonesian market, albeit in a small way, said Teoh. "Hopefully, the Bamboo Salt distributorship will pave the way for us to capture a bigger share of the market there." (Sun)
SEGi: The ball in Hii’s court
Will SEG International Bhd (SEGi) founder and largest shareholder Datuk Seri Clement Hii cash out or will he not? He has said publicly that he would be staying on no matter what. There was speculation that he would be making an exit following the acquisition of a 27.8% stake in the company by Navis Capital Partners Ltd, a private equity (PE) firm, at the end of last month. Navis has been known to be not only an active investor but also one which prefers control. Hii, also the group managing director of the tertiary education provider, has been in discussion with Navis' founders on ways to work together now that the PE firm has become the second largest shareholder in the company. Hii, according to Bloomberg data, remains the largest shareholder with a 29.8% stake. (Source: The Star)
LBS Bina to finally exit China
Sources said LBS will ink a deal this week to dispose of its 50% stakes in two joint ventures in China, one involving a golf course and the other a proposed 197-acre property development in Zhuhai. LBS could still play the role of contractor in the property project following the divestment, the sources add. (Source: The Edge)
Invensys-led group tipped to win Ampang LRT job
Malaysia is expected to award a RM950 million contract for system works for the Ampang light rail transit (LRT) line extension project to a consortium led by the UK’s Invensys plc. Government sources said the contract is expected to be awarded within the next one month and will help strengthen bilateral trade ties between Kuala Lumpur and London. Invensys is a global engineering and information technology group. Its consortium partners are Balfour Beatty Rail Sdn Bhd, which is 70 per cent owned by the UK’s Balfour Beatty plc – an infrastructure giant with strong finances, and Ingress Corp Bhd. Engineering group Ingress, which posted a pretax profit of RM31.05 million in fiscal year 2011, also owns 30 per cent of Balfour Beatty Rail. (Source: Business Times)
Telekom Malaysia: RM2.5bn capex for this year
Telekom Malaysia Bhd (TM) has allocated some RM2.5bn capital expenditure this year to improve its network and services nationwide. According to CEO Datuk Seri Zamzamzairani Mohd Isa, the budget will also be used for new businesses. TM, which currently operates Unifi high speed broadband, is now looking at contents and applications. Zamzamzairani said the group is also considering cloud computing and business process outsourcing. Meanwhile, Zamzamraini said TM aims to hit the 400,000 customer base mark for Unifi this year. TM also plans to develop more information, technology and communication technology services for the small and medium entrepreneurs. For a start, he said TM has signed a partnership agreement with Microsoft for the Office 365 software to expand our cloud computing services. (Business Times)
Bumi Armada: Unit forms US-based subsidiary
Bumi Armada’s wholly owned unit Bumi Armada Offshore Holdings Ltd , has formed a wholly-owned subsidiary in the United States to be principally involved in the offshore oil and gas marine services. Bumi Armada said on Friday that the company known as Armada Blue had been formed on Apr 2, 2012 as a limited liability company in accordance with the laws of the State of Texas. (Financial Daily)
I-Bhd: To build condo, duplex houses in i-City
I-Berhad is set to build 348 condominium units and 20 duplex houses in the city of digital lights in Seksyen 7 here. Each residential unit in i-City starts from RM340,000. I-Berhad CEO Datuk Eu Hong Chew said the i-Residence project constituted 20 percent of the 29ha i-City development. Eu said i-City, dubbed the first lighscape tourism destination in Malaysia with state-of-the-art LED technology showcase, would also have a new attraction inspired by Clarke Quay, a riverside development in Singapore. He said it was in line with the state government's project to upgrade the 7-km Sungai Rasau that cuts across i-City. He added that this development was included in the estimated gross development value of RM1bn.(Bernama)
Perdana Petroleum: Ibrahim sues company
Former major shareholder of oil and gas services provider Petra Perdana, Tengku Datuk Ibrahim Petra Tengku Indra Petra is suing Perdana Petroleum, the Malaysian Communications and Multimedia Commission (MCMC) as well as 11 other individuals for exemplary damages of RM50m and to have an injunction against the parties for assessing and using an email account belonging to him. The writ of summons also sought general damages for trespass against the plaintiff’s property, costs and other reliefs. Furthermore, the writ is seeking a declaration from the MCMC that it is the multimedia regulator’s duty to accept and investigate the plaintiff’s complaint. Perdana Petroleum (formerly known as Petra Perdana) said in an announcement to the stock exchange that the company was in the process of appointing a solicitor for the necessary course of action. (StarBiz)
asiaEP: Boardroom tussle over – for now
The boardroom tussle at ACE Market-listed asiaEP Resources Bhd is over for now. The twomonth drama came to an end yesterday at an extraordinary general meeting (EGM), with most shareholders voting in favour to retain the existing board of directors, comprising asiaEP's co-founders Dr Tan Boon Nunt and Lee Suet Hong, as well as three other directors, namely Khor Chai Tian, Chu Kheh Wee and Lim Ghim Chai. Results showed that among the shareholders who turned up, at least 75% have voted in favour to retain the existing board of directors, while around 23% to 25% had voted for their removal. “After this long havoc' that lasted for the past two months, finally, most shareholders, seeing that we are the founding members of the company, have chosen to continue to give their support to the existing board of directors,” Dr Tan, who is also asiaEP's executive chairman and MD, told reporters. (StarBiz)
20120409 1202 Global Market & Commodities Related News.
GLOBAL MARKETS-Shares fall on sluggish US jobs, focus on more data
TOKYO, April 9 (Reuters) - Asian shares fell on Monday as a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy, making investors cautious ahead of more U.S. data and earnings as well as figures from China due this week.
"Price actions after the jobs data show that markets had been excessively discounting the U.S. economic recovery and must now fill the gap between the reality and prices built on perceived strength of the economy," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.
COMMODITIES-Oil, gold rebound as key jobs, trade data loom
NEW YORK, April 5 (Reuters) - Oil and gold prices rebounded from multi-week lows in subdued trade on Thursday, as traders focused on new signs of a U.S. economic recovery and mounting concerns over Iran's oil exports.
"Geopolitical and supply risk worries are pushing oil prices higher ahead of a three-day holiday weekend," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
OIL-Brent slips below $123 on Iran nuclear talks
SINGAPORE, April 9 (Reuters) - Brent crude slipped more than $1 on Monday as Iran agreed to resume talks with top world powers this week on the country's nuclear programme, raising hopes of a peaceful end to the standoff that has rattled oil market for months.
NATURAL GAS-US natgas futures end near 10-year low as glut grows
NEW YORK, April 5 (Reuters) - Front-month U.S. natural gas futures ended just above a 10-year low on Thursday, pressured by another bearish weekly inventory report despite cooler forecasts for late this week and early next week that should boost demand.
"The (EIA build) number came in higher than expected. It was another bearish number, and it looks like they're jamming it in early in the producing region," a Massachusetts trader said.
EURO COAL-Prices fall ahead of Easter weekend
LONDON, April 5 (Reuters) - European physical coal prices fell along with other energy markets on Thursday as demand was sapped from the markets ahead of the Easter holiday weekend.
China ship insurer deals new blow to Iran oil exports
SINGAPORE, April 5 (Reuters) - A major Chinese ship insurer will halt cover for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC's second largest producer, two officials from the insurance provider told Reuters on Thursday.
This is the first sign that refiners in China, Iran's top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country.
TOKYO, April 9 (Reuters) - Asian shares fell on Monday as a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy, making investors cautious ahead of more U.S. data and earnings as well as figures from China due this week.
"Price actions after the jobs data show that markets had been excessively discounting the U.S. economic recovery and must now fill the gap between the reality and prices built on perceived strength of the economy," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.
COMMODITIES-Oil, gold rebound as key jobs, trade data loom
NEW YORK, April 5 (Reuters) - Oil and gold prices rebounded from multi-week lows in subdued trade on Thursday, as traders focused on new signs of a U.S. economic recovery and mounting concerns over Iran's oil exports.
"Geopolitical and supply risk worries are pushing oil prices higher ahead of a three-day holiday weekend," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
OIL-Brent slips below $123 on Iran nuclear talks
SINGAPORE, April 9 (Reuters) - Brent crude slipped more than $1 on Monday as Iran agreed to resume talks with top world powers this week on the country's nuclear programme, raising hopes of a peaceful end to the standoff that has rattled oil market for months.
NATURAL GAS-US natgas futures end near 10-year low as glut grows
NEW YORK, April 5 (Reuters) - Front-month U.S. natural gas futures ended just above a 10-year low on Thursday, pressured by another bearish weekly inventory report despite cooler forecasts for late this week and early next week that should boost demand.
"The (EIA build) number came in higher than expected. It was another bearish number, and it looks like they're jamming it in early in the producing region," a Massachusetts trader said.
EURO COAL-Prices fall ahead of Easter weekend
LONDON, April 5 (Reuters) - European physical coal prices fell along with other energy markets on Thursday as demand was sapped from the markets ahead of the Easter holiday weekend.
China ship insurer deals new blow to Iran oil exports
SINGAPORE, April 5 (Reuters) - A major Chinese ship insurer will halt cover for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC's second largest producer, two officials from the insurance provider told Reuters on Thursday.
This is the first sign that refiners in China, Iran's top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country.
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