The inflow of foreign funds into Bursa Malaysia last week remained sizeable as foreign investors bought, on a net basis, RM308m (US$99.1m) worth of Malaysian stocks for the seventh consecutive week. For the year until 3 Aug the cumulative net inflow of foreign funds into Malaysian equities amounted to RM9.5bn (US$3.06bn). It was much higher compared with only RM1.9bn (US$611.46m) registered for the entire 2011, Malaysian Industrial Development Finance (MIDF) Research said. Meanwhile, local retailers continued to be net sellers for the tenth consecutive week with sales declining to RM62m (US$19.95m), the lowest in seven weeks. The report revealed that the participation rate also dropped significantly to RM747m (US$240.39m). (Bernama)
Malaysia’s participation at the recent SEMICON West 2012 in San Francisco, California, generated sales of RM333.78m against sales of RM22m chalked up at the same event last year. The Malaysia External Trade Development Corp (Matrade) said the event, held between 10 July and 12 July, was the flagship event for microelectronic manufacturing and semiconductor industries. Matrade said worldwide spending on semiconductor fabrication equipment this year was expected to amount to RM124.12bn and RM145.42bn next year, an all-time record high for fabrication equipment spending. (Bernama)
US Federal Reserve Chairman Ben Bernanke said that although broad measurements of the economy like consumer spending, disposable income, ousehold net worth and debt service payments point to recovery, many people and businesses are facing tough times. (Reuters)
The US Federal Reserve said banks continued to ease lending standards for larger firms in the last three months but small businesses are still having a hard time accessing credit. (Reuters)
The IMF, facing discontent among its members about the huge sums it has lent to the euro zone, is pushing the currency bloc's governments to take steps to lighten the burden of the bailout loans they made to Athens, officials familiar with continuing discussions said. (WSJ)
Eurozone’s sentix investor confidence fell by 0.7pt to -30.3 in Aug (-29.6 in Jul), the fifth consecutive month of decline and the lowest in more than three years. Economists had forecast the index to fall to -31. The expectations index rose to -23.3 from -24 in July, whilst current conditions fell to -37 from -35. (RTTNews)
Japan’s coincident index fell a preliminary 2.0pts mom in Jun (-1.2pt in May), the third straight month of decline, whilst the leading index fell 2.6pts mom (-0.4pt in May). The Cabinet Office thus downgraded its view on the coincident index, saying it is stalling. That compared with its previous view that the index was showing an improvement. (Reuters)
India's new pro-market finance minister P. Chidambaram pledged to take steps to restore foreign investors' faith in Asia's third-largest economy and "restart the growth engine". (AFP)
Indonesia’s GDP growth last quarter was 6.4% yoy against 6.3% in the first quarter, helped by domestic consumption and investment. GDP grew by 2.8% qoq (1.4% in 1Q12). (Reuters, Bloomberg)
Indonesia’s consumer confidence index inched lower to 113.5 in Jul from 114.4 in Jun. (Bloomberg)
Tuesday, August 7, 2012
20120807 1526 Malaysia Corporate Related News.
Felda Global Ventures Holdings Bhd (FGV) is reorganising the 88 subsidiaries in its stable into four clusters to make it leaner and more efficient. FGV president and chief executive officer Datuk Sabri Ahmad said the restructuring was part of the group’s 40-point initiatives to be implemented 100 days after its listing two months ago. The clusters are plantations, downstream, sugar and Felda Holdings Bhd. The latter is FGV’s associate company. “The clusters, however, will not be listed on their own in the future,” Sabri said, adding that only FGV and MSM would remain as the listed entity. (BT)
Bloomberg survey shows that palm oil stockpiles in Malaysia probably climbed the most in 10 months in July to 1.87m tonnes from 1.7m tonnes in June as output increased and exports fell, easing supply concerns as a drought cuts US soybean yields. The Malaysian Palm Oil Board is set to release the official data this Friday. (Malaysian Reserve)
The condition of U.S. soybean crops deteriorated as the worst drought in 56 years caused damage across the Midwest. US Department of Agriculture reported about 39% of soybeans were rated poor to very poor as of yesterday, more than the 37% of a week earlier. “There were some areas that got rain, but it was later in the weekend, so I don’t think it was picked up on this report,” said an industry source. (Bloomberg)
From 2006 to 30 Jun 2012, Iskandar Malaysia had received RM95.5bn cumulative committed investments in various sectors with RM41.35bn or 43% already realised. Of the total, RM58.95bn or 62% were from domestic investors. Since 2006, the manufacturing sector took the top spot with RM32.71bn, with the property sector came in second at RM29.80bn. Investment in other sectors include utilities (RM9.52bn), government (RM7.31bn), petrochemicals (RM5.10bn), ports and logistics (RM3.74bn), tourism (RM2.03bn), education (RM1.55bn), healthcare (RM1.60bn), creative (RM0.40bn) and others (RM1.69bn). Last year, Iskandar Malaysia managed to record RM15.3bn investments of its projected RM15bn target. This year, it is looking at a RM20bn target. In the first six months of 2012, Iskandar Malaysia had secured RM10.67bn new investments. Therefore, it would not be impossible to achieve this year's target, Iskandar Regional Development Authority (Irda) CEO Datuk Ismail Ibrahim said. (Starbiz)
The aggressive expansion of Singapore Airlines’ (SIA) short-haul premium unit SilkAir is expected to heighten competition for Malaysian Airline(MAS). SilkAir’s recent orders for 68 new aircraft, to be delivered between 2014 and 2021, will eventually boost its current fleet of 21 planes to 89. There is a possibility of SilkAir dominating SIA’s route network of less than four hours flight radius in Asia. (Financial Daily)
After gaining approval from shareholders to proceed with the merger exercise, K&N Kenanga Holdings expects a 30-40% in cost synergies post-merging with ECM Libra. The integration cost for the two entities was about RM260m. The company had engaged with Boston Consulting Group in the integration. (Star Biz)
KYM Holdings Bhd may axe its plan to venture into iron ore mining in Aceh, Sumatra, after the government there imposed an export ban on the product, a key official said. KYM COO Allan Chin Kong Yaw said the plan would also now require a bigger investment than estimated after the government wanted the venture to process the raw materials in Aceh instead. “The government says we can’t export the iron ore. It wants us to process the raw materials there and that will require huge investments from us,” he said. Chin told BT recently that KYM would seek legal advice on the matter. “We hope to find a solution. There is a huge potential in Aceh. But if we think the venture is not viable because of the huge investments needed, we will not proceed,” Chin said.(BT)
Willoglen MSC’s unit Willoglen Services Pte Ltd has won a contract worth RM9.7m to upgrade an integrated security and operation surveillance system infrastructure for substations and security command centre. (BT)
Uzma Bhd's subsidiary has secured a RM62m contract from Talisman Malaysia Ltd to supply of chemical and related services over five years.Its subsidiary Malaysian Energy Chemical & Services Sdn. Bhd had received the letter of award for the contract, which was retroactive from July 6 this year and until July 5, 2017. The contract has four extension options of one year each. (Starbiz)
TH Heavy Engineering Bhd's issuance of 265.m rights shares under its regularisation plan, recorded a subscription rate of 99.5%. As of July 27, the total valid acceptance was 263.7m shares. "In view that the rights shares have been undersubscribed, all applications for the excess rights shares are successful," it said. TH Heavy Engineering said that 89.7m unsubscribed rights shares would be allotted to applicants who applied for 88.4m excess rights shares. (Starbiz)
Bloomberg survey shows that palm oil stockpiles in Malaysia probably climbed the most in 10 months in July to 1.87m tonnes from 1.7m tonnes in June as output increased and exports fell, easing supply concerns as a drought cuts US soybean yields. The Malaysian Palm Oil Board is set to release the official data this Friday. (Malaysian Reserve)
The condition of U.S. soybean crops deteriorated as the worst drought in 56 years caused damage across the Midwest. US Department of Agriculture reported about 39% of soybeans were rated poor to very poor as of yesterday, more than the 37% of a week earlier. “There were some areas that got rain, but it was later in the weekend, so I don’t think it was picked up on this report,” said an industry source. (Bloomberg)
From 2006 to 30 Jun 2012, Iskandar Malaysia had received RM95.5bn cumulative committed investments in various sectors with RM41.35bn or 43% already realised. Of the total, RM58.95bn or 62% were from domestic investors. Since 2006, the manufacturing sector took the top spot with RM32.71bn, with the property sector came in second at RM29.80bn. Investment in other sectors include utilities (RM9.52bn), government (RM7.31bn), petrochemicals (RM5.10bn), ports and logistics (RM3.74bn), tourism (RM2.03bn), education (RM1.55bn), healthcare (RM1.60bn), creative (RM0.40bn) and others (RM1.69bn). Last year, Iskandar Malaysia managed to record RM15.3bn investments of its projected RM15bn target. This year, it is looking at a RM20bn target. In the first six months of 2012, Iskandar Malaysia had secured RM10.67bn new investments. Therefore, it would not be impossible to achieve this year's target, Iskandar Regional Development Authority (Irda) CEO Datuk Ismail Ibrahim said. (Starbiz)
The aggressive expansion of Singapore Airlines’ (SIA) short-haul premium unit SilkAir is expected to heighten competition for Malaysian Airline(MAS). SilkAir’s recent orders for 68 new aircraft, to be delivered between 2014 and 2021, will eventually boost its current fleet of 21 planes to 89. There is a possibility of SilkAir dominating SIA’s route network of less than four hours flight radius in Asia. (Financial Daily)
After gaining approval from shareholders to proceed with the merger exercise, K&N Kenanga Holdings expects a 30-40% in cost synergies post-merging with ECM Libra. The integration cost for the two entities was about RM260m. The company had engaged with Boston Consulting Group in the integration. (Star Biz)
KYM Holdings Bhd may axe its plan to venture into iron ore mining in Aceh, Sumatra, after the government there imposed an export ban on the product, a key official said. KYM COO Allan Chin Kong Yaw said the plan would also now require a bigger investment than estimated after the government wanted the venture to process the raw materials in Aceh instead. “The government says we can’t export the iron ore. It wants us to process the raw materials there and that will require huge investments from us,” he said. Chin told BT recently that KYM would seek legal advice on the matter. “We hope to find a solution. There is a huge potential in Aceh. But if we think the venture is not viable because of the huge investments needed, we will not proceed,” Chin said.(BT)
Willoglen MSC’s unit Willoglen Services Pte Ltd has won a contract worth RM9.7m to upgrade an integrated security and operation surveillance system infrastructure for substations and security command centre. (BT)
Uzma Bhd's subsidiary has secured a RM62m contract from Talisman Malaysia Ltd to supply of chemical and related services over five years.Its subsidiary Malaysian Energy Chemical & Services Sdn. Bhd had received the letter of award for the contract, which was retroactive from July 6 this year and until July 5, 2017. The contract has four extension options of one year each. (Starbiz)
TH Heavy Engineering Bhd's issuance of 265.m rights shares under its regularisation plan, recorded a subscription rate of 99.5%. As of July 27, the total valid acceptance was 263.7m shares. "In view that the rights shares have been undersubscribed, all applications for the excess rights shares are successful," it said. TH Heavy Engineering said that 89.7m unsubscribed rights shares would be allotted to applicants who applied for 88.4m excess rights shares. (Starbiz)
20120807 1520 Global Market Related News.
Asia FX By Cornelius Luca - Mon 06 Aug 2012 16:19:15 CT (Source:CME/www.lucafxta.com)
The appetite for risk was limited on Monday following relief buying on Friday triggered by a stronger-than-expected NFP report. The foreign currencies made little progress after the European and commodity currencies soared on Friday. The US stock indexes accumulated small gains. The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the yen. Good luck!
Asian Stocks Gain on Europe Central Bank Bond-Buying Plan (Source:Bloomberg)
Asian stocks rose, with the regional benchmark index headed for its highest close in three months, after Germany backed the European Central Bank’s bond-buying plan, boosting the outlook for Asia-Pacific exporters. Esprit Holdings Ltd. (330), a clothier that counts Europe as its largest market, gained 25 percent in Hong Kong after it named a new chief executive officer. BHP Billiton Ltd., the world’s biggest miner, rose 0.5 percent in Sydney after metal prices increased. Toshiba Corp., which makes semi-conductors and parts for nuclear reactors, advanced 3.5 percent in Tokyo as it was raised to outperform at CLSA Asia Pacific Markets. Japanese utilities gained as they rebounded from last month’s plunge. The MSCI Asia Pacific Index (MXAP) rose 0.6 percent to 119.78 as of 3:30 p.m. in Tokyo, with about five stocks rising for every two that that fell in the measure, which is headed for its highest close since May 9.
“Investors are hoping that Spain won’t request a full bailout,” said Stan Shamu, a market strategist at IG Markets Ltd. in Melbourne, a provider of trading services in stocks, bonds and commodities. “That would clear the way for the ECB to buy bonds in the secondary market. That’s still the main issue.” Japan’s Nikkei 225 Stock Average (NKY) rose 0.9 percent, while South Korea’s Kospi Index added 0.1 percent. Australia’s S&P/ASX 200 Index advanced 0.5 percent as the nation’s central bank kept interest rates unchanged today. New Zealand’s NZX 50 Index gained 0.6 percent.
Japan’s Nikkei 225 Reaches Month High on ECB Bond Plan (Source:Bloomberg)
Japanese stocks gained for a second day, with the Nikkei 225 Stock Average (NKY) closing at a four-week high, amid optimism Germany will support the European Central Bank’s bond-buying plan to ease the region’s debt crisis. Brother Industries Ltd. (6448), a maker of office equipment that relies on Europe for almost 30 percent of its sales, jumped 4.3 percent. Nippon Paint Co. soared 4.9 percent after boosting its earnings forecast. Sharp Corp. rebounded from a 37-year low yesterday on speculation Foxconn Technology Group would follow through with its investment in the electronics maker. Kansai Electric Power Co., which has plunged 29 percent in the past 30 days, gained 10 percent. The Nikkei 225 Stock Average rose 0.9 percent to 8,803.31 at 3 p.m. in Tokyo, the highest close since July 11, with volume 7.6 percent below the 30-day average ahead of the Bank of Japan’s meeting tomorrow. The broader Topix Index gained 1.1 percent to 743.70. More than two shares rose for each that fell.
“There are expectations that the ECB’s bond-purchasing plan will ease debt crisis tensions, bolstering markets,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “Earnings are just so-so on the whole. Some technology companies have been hurt by the stronger yen but I don’t have an impression that their earnings are very bad.”
China’s Stocks Swing Between Gains, Losses on Profit Concern (Source:Bloomberg)
China’s stocks swung between gains and losses as concern the slowing economy will hurt profit growth overshadowed support by German Chancellor Angela Merkel’s government for the European Central Bank’s bond-buying plan. China Life Insurance Co. slid to a one-week low after estimating first-half net income fell by a “relatively large degree.” Southwest Securities Co. declined 2.6 percent after ending a plan to acquire a rival brokerage because of falling stock prices and lower earnings. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. led gains among rare earth stocks after China National Radio reported the country plans to shut down about a fifth of existing industry production capacity.
The Shanghai Composite Index slid less than 0.1 percent to 2,154.39 at 1:02 p.m. local time. The CSI 300 Index (SHSZ300) was little changed at 2,385.31. The Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong advanced 0.4 percent. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, added 3.1 percent. “There are still expectations company earnings will fall,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “However, sentiment towards Europe has improved. Previously, investors expected the worst for Europe. With a little progress now, people are getting a tad more optimistic.”
U.S. Stocks Rise on Europe as Earnings Beat Estimates (Source:Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index to a three-month high, as German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan and earnings beat forecasts. Bank of America Corp. (BAC), Caterpillar Inc. (CAT) and Alcoa Inc. (AA) jumped at least 1.8 percent to pace advances among the largest U.S. companies. Best Buy Co. (BBY) surged 12 percent as founder Richard Schulze offered to take the electronics retailer private. Regions Financial Corp. (RF) added 1.9 percent after Bank of America Corp. raised its recommendation on the shares. Knight Capital Group Inc. (KCG), the firm driven to the brink of bankruptcy by trading losses last week, tumbled 21 percent.
About five stocks advanced for every two falling on U.S. exchanges at 12:41 p.m. New York time. The S&P 500 (SPX) rose 0.5 percent to 1,398.38. The Dow Jones Industrial Average added 76.48 points, or 0.6 percent, to 13,172.65. Trading in S&P 500 companies was down 15 percent from the 30-day average at this time of day. “There’s better general feeling,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a phone interview. “We’ve had a good earnings season and better than estimated data last week. The weekend didn’t bring any painful news out of Europe and there are expectations the ECB will buy bonds.”
European Stock Futures Little Changed; Asian Stocks Rise (Source:Bloomberg)
European (SXXP) stock-index futures were little changed before reports on factory orders in Germany and Italian economic growth. U.S. index futures were also little changed, while Asian stocks advanced. Standard Chartered (STAN) Plc may drop in London, following losses in Asia, after a U.S. regulator said the lender faces suspension of business activities because of transactions with Iranian banks. Deutsche Telekom AG (DTE) may be active after people familiar with the matter said it may bid for PrimaCom Berlin GmbH. Xstrata Plc (XTA), target of a $27 billion takeover bid by Glencore International Plc, may be active after reporting first-half profit that beat analyst estimates. Futures on the Euro Stoxx 50 Index, a benchmark for the euro region, fell 0.2 percent to 2,393 at 7:05 a.m. in London. Futures on the U.K.’s FTSE 100 Index (UKX) also lost 0.2 percent to 5,760. Futures on the Standard & Poor’s 500 Index dropped less than 0.1 percent, while the MSCI Asia Pacific Index increased 0.6 percent.
The Stoxx 600 Index climbed yesterday, extending a four- month high, as Greece and its creditors agreed on the need to strengthen policy efforts to meet bailout conditions and support economic growth. The benchmark measure has climbed 13 percent over the past nine weeks as policy makers eased repayment terms for Spanish banks and optimism grew that central banks will announce stimulus measures.
Most Emerging Stocks Rise After Germany Backs ECB Plan (Source:Bloomberg)
Most emerging-market stocks advanced as Germany’s support for the European Central Bank’s bond-buying plan overshadowed concerns slowing economies will hurt company earnings. China Rongsheng Heavy Industries Group Holdings Ltd. (1101), the country’s biggest shipbuilder outside state control, surged 12 percent in Hong Kong on speculation orders will increase as concerns ease about Europe’s debt crisis, according to UOB-Kay Hian Holdings Ltd. China ZhengTong Auto Services Holdings Ltd. (1728) rose the most in almost two months after Value Partners Group Ltd. raised its stake in the auto retailer. HTC Corp. (2498) tumbled 7 percent in Taipei, extending yesterday’s 6.9 percent slump, after forecasting revenue that missed analysts’ estimates.
The MSCI Emerging Markets Index rose less than 0.1 percent to 967.54 at 1:07 p.m. in Hong Kong with 297 stocks gaining and 188 falling. German Chancellor Angela Merkel backed a bond- buying plan announced last week by the ECB, a spokesman said yesterday, fanning speculation the monetary authority will act to cut borrowing costs for Spain and Italy. The 21 nations in the MSCI emerging market gauge send about 30 percent of their exports to the European Union on average, data compiled by the World Trade Organization show. “Germany’s support is very crucial as it’s the biggest economy in Europe,” said Akbar Syarief, a fund manager overseeing about $359 million at PT MNC Asset Management in Jakarta. Meanwhile, “a lot of companies have earnings that don’t meet expectations. Overseas demand is low.”
Treasuries Snap Loss After Bernanke Notes ‘Struggle’ (Source:Bloomberg)
Treasuries snapped a two-day decline after Federal Reserve Chairman Ben S. Bernanke said people are struggling economically, fueling speculation he is open to increasing bond purchases to spur growth. Treasuries returned 6.8 percent in the 12 months to yesterday, based on Bank of America Merrill Lynch data, reflecting demand for U.S. debt as a haven from slowing economic growth and Europe’s debt crisis. The rally was interrupted this month after a U.S. report Aug. 3 showed the nation added more jobs than economists projected. The government is scheduled to sell $32 billion of three-year notes today, $24 billion of 10- year debt tomorrow and $16 billion of 30-year bonds on Aug. 9. “If Bernanke thinks they should do something to support the economy, it will put downward pressure on yields,” said Kei Katayama, who buys U.S. government debt in Tokyo for Daiwa SB Investments Ltd., which manages the equivalent of $63.6 billion. “That makes it very difficult to sell.”
Benchmark 10-year yields were little changed at 1.57 percent as of 6:50 a.m. in London, according to Bloomberg Bond Trader prices. The record low was 1.38 percent July 25. The price of the 1.75 percent security due in May 2022 was 101 21/32 today.
Treasury Bears Submit to Fed as Bond Optimism at High (Source:Bloomberg)
Jay Mueller, who manages $3 billion of bonds for Wells Capital Management in Milwaukee, resisted buying Treasuries for four months, anticipating the Federal Reserve would drop its pledge to keep interest rates at a record low through late 2014. No more. With the economy growing at a 1.5 percent annual pace, the odds of a recession have risen to 60 percent, making 1 percent yields on 10-year notes a possibility, he said. Wells Capital’s parent, Wells Fargo & Co., boosted its Treasury holdings 32 percent to $11.5 billion in May alone, according to the latest data compiled by Bloomberg. “We’re in a low-rate environment for a long time, longer than I had thought,” Mueller said in a July 26 interview at Bloomberg headquarters in New York. “I’m finally throwing in the towel.”
So are Pioneer Investment Management Inc., Pacific Investment Management Co., Federated Investors Inc., Northern Trust Global Investments and Columbia Management Investment Advisers LLC. They are adding to holdings of Treasuries as economic growth cools. Of the 20 firms that own the most Treasuries, 16 bought more U.S. government debt during their most-recent reporting periods, Bloomberg data show.
FOREX-Euro dips on caution over debt crisis response
LONDON, Aug 6 (Reuters) - The euro fell as investors remained cautious about how effective European policymakers latest pledges of action to resolve the euro zone debt crisis would be.
"There hasn't been anything that has improved the situation in Europe ... we haven't had any concrete improvement in the situation in the euro zone," said Niels Christensen, currency strategist at Nordea in Copenhagen.
FOREX-Euro touches 1-month high on stop-loss buying
The euro hit a one-month high against the dollar as traders unwound bearish bets on the single currency after stronger-than-expected U.S. jobs data last week improved investors' appetite for risk.
"When you think about the fact that something positive will probably materialise even if it takes some time, the euro could see a bit of a rebound," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, referring to possible ECB measures.
Yen Stays Stronger Before BOJ Meeting; Aussie Near 4-Mont (Source:Bloomberg)
The yen remained stronger versus the dollar as a rally in equities worldwide spurred speculation the Bank of Japan (8301) will refrain from additional monetary easing at a policy meeting that starts tomorrow. Demand for the euro was supported after German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan as Italian Prime Minister Mario Monti called for more urgency in efforts to lower borrowing costs. The Australian dollar rose to the highest in more than four months after the nation’s Reserve Bank kept interest rates unchanged at 3.5 percent at a policy meeting today. “The Bank of Japan looks set to keep policy unchanged,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “Without any impediment from the Bank of Japan, we’ll see more of the same, that gradual grind lower in the next few sessions and coming months for dollar-yen.”
The yen was little changed at 78.28 per dollar at 6:45 a.m. in London from yesterday, when it rose 0.3 percent. The Japanese currency was at 96.99 per euro from 97.03. The 17-nation euro bought $1.2390 from $1.2401 yesterday, when it touched $1.2444, the most since July 5. Australia’s dollar reached $1.0603, the highest since March 20, before trading at $1.0581, 0.1 percent above yesterday’s close.
Aussie Dollar Touches 4-Month High as RBA Holds Rates (Source:Bloomberg)
Australia’s dollar touched its highest level in more than four months after the Reserve Bank kept interest rates unchanged and said current policy settings are “appropriate.” The so-called Aussie rose against most major peers after RBA Governor Glenn Stevens and his board said in a statement from Sydney the nation’s growth is close to trend. New Zealand’s currency maintained a three-day gain as Asian stocks extended a global rally, supporting demand for riskier assets. “I think the RBA hasn’t really set out a case for lowering interest rates, so I suspect that’s probably maybe a surprise to the markets,” said Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore. The overall statement “seemed to be quite bullish for the Aussie dollar.” Australia’s dollar touched $1.0603, the strongest level since March 20, before trading little changed at $1.0570 as of 4:09 p.m. in Sydney. It traded at 82.73 yen from 82.70 yesterday.
New Zealand’s dollar, nicknamed the kiwi, was also little changed at 81.97 U.S. cents, after rising 1.5 percent over the previous three trading sessions. It bought 64.17 yen from 64.16. The MSCI Asia Pacific Index of shares rose 0.6 percent, after climbing 1.8 percent yesterday.
Bank Loans at Post-Recession Peak Support U.S. Growth (Source:Bloomberg)
Banks in the U.S. are lending the most since the recession ended in June 2009, supporting an economy weighed down by 8.3 percent unemployment. Borrowing by consumers and businesses rose in the week ended July 25 to $7.1 trillion, within 2.9 percent of its October 2008 peak, according to Federal Reserve data. New lending for autos jumped to $134.3 billion in the first four months of the year, up 56 percent from the same period in 2009, according to credit bureau Equifax Inc. (EFX) The increase in lending may prevent the economy from slowing further after growth cooled to a 1.5 percent annual pace of growth in the second quarter. While the Fed last week moved closer to expanding its record stimulus, the figures on credit indicate that 43 months of near-zero interest rates may finally be giving the economy the jolt it needs, said Jim Paulsen, who helps oversee $320 billion as chief investment strategist at Wells Capital Management in Minneapolis.
“Many pieces of the credit-creation process are starting to work again,” Paulsen said. “Banks are lending, people are borrowing, housing prices are going up and a sense of normality is returning.”
Bernanke Says Economic Data May Mask Individual Suffering (Source:Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said gauges of the U.S. economy’s strength may fail to measure the suffering of individual citizens. “Even though some key aggregate metrics -- including consumer spending, disposable income, household net worth, and debt service payments -- have moved in the direction of recovery, it is clear that many individuals and households continue to struggle with difficult economic and financial conditions,” Bernanke said today in remarks prepared for a conference in Cambridge, Massachusetts. The Federal Open Market Committee said on Aug. 1 it will pump fresh stimulus if necessary into the weakening economic expansion to boost growth and reduce an unemployment rate that’s been stuck at 8 percent or higher for more than three years. Bernanke didn’t address the outlook for monetary policy or the economy, or expand on the Fed’s Aug. 1 statement. His remarks, focused on economic measurement, will be delivered via prerecorded video.
The 58-year-old Fed chief, a former Princeton professor, said economists should “increase the attention paid to microeconomic data, which better capture the diversity of experience across households and firms.” Also, researchers should “seek better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions.”
Fed Says Banks Ease Standards on Business, Consumer Loans (Source:Bloomberg)
U.S. banks are relaxing their terms on credit cards and lending for autos and commercial real estate, according to a Federal Reserve survey. “Domestic banks, on balance, continued to report having eased their lending standards across most loan types over the past three months,” the Fed said today in Washington in its quarterly survey of senior loan officers. While lending standards are tightening at branches of foreign banks, “domestic banks reported that their business had increased due to decreased competition from European banks and that they remain willing to accommodate additional such business,” the Fed said. Banks in the U.S. are lending the most since the recession ended in June 2009, supporting an economy burdened by 8.3 percent unemployment. Fed policy makers including Chairman Ben S. Bernanke weighed the results of the survey at their July 31- Aug. 1 meeting at which they said they “will provide additional accommodation as needed” to support the economy.
Monti Calls for More Crisis Urgency in ECB Crisis Standoff (Source:Bloomberg)
Italy’s Prime Minister Mario Monti warned of a potential breakup of Europe without greater urgency in efforts to lower government borrowing costs, as a standoff over European Central Bank help for Italy and Spain hardened. Monti, in an interview with Germany’s Der Spiegel magazine published yesterday, said that disagreements within the 17- nation euro area are detracting from the policy response to the debt crisis and undermining the future of the European Union. “The tensions that have accompanied the euro zone in the past years are already showing signs of a psychological dissolution of Europe,” Monti told Der Spiegel. While he backed the ECB’s willingness to address “severe malfunctioning” in the government bond market, Monti said the problems “have to be solved quickly now so that there’s no further uncertainty about the euro zone’s ability to overcome the crisis.”
Spain and Italy, whose surging borrowing costs have shunted them to the heart of the turmoil in the euro area, are resisting pressure from ECB President Mario Draghi to formally request aid in return for strict conditions before the central bank will buy their bonds. Monti and Spanish Prime Minister Mariano Rajoy have both said they will await further details as the ECB works up its plan. The German government said for the first time today that Chancellor Angela Merkel supports Draghi’s proposals. French President Francois Hollande is pushing Monti and Rajoy to request aid from Europe’s bailout fund to help ease markets and protect France from speculation, Italian newspaper la Corriere della Sera reported, without citing anyone. Monti may speak with Draghi today, the newspaper said.
Rice Hoard Offers World Respite as Food Costs Surge: Commodities (Source:Bloomberg)
At a time when droughts are driving corn and soybeans to all-time highs, farmers are set to reap a record rice crop and Thailand is building the biggest stockpile in at least five decades, helping avoid a global food crisis. The largest exporting nation bought 11 million metric tons as of July, enough to supply the six biggest importers, Commerce Ministry data show. As corn farmers from the U.S. to Ukraine endure drought, paddy fields will yield 1.1 million tons more milled grain, the U.S. Department of Agriculture predicts. Benchmark 5-percent Thai white rice will drop 14 percent to $480 a ton by Dec. 31, according to the median of 10 estimates from traders and analysts surveyed by Bloomberg.
Shipments of the staple for half the world will expand 2.6 percent to a record in 2012-2013, the USDA predicts. Those exports combined with Thailand’s stockpiles, which may be cut to clear space for the next harvest, are a buffer against grain reserves seen at the lowest in at least five years. Cheaper rice may contain global food costs the United Nations predicts will rebound, ending a retreat to a 21-month low in June. “Rice is the only bright spot which is keeping us away from a global food crisis,” said Abdolreza Abbassian, a senior economist at the UN’s Food & Agriculture Organization in Rome. “The corn situation is very worrisome, while with wheat, the overall supply situation is still adequate.”
Monti Calls for More Crisis Urgency in ECB Standoff (Source:Bloomberg)
Italy’s Prime Minister Mario Monti warned of a potential breakup of Europe without greater urgency in efforts to lower government borrowing costs, as a standoff over European Central Bank help for Italy and Spain hardened. Monti, in an interview with Germany’s Der Spiegel magazine published yesterday, said that disagreements within the 17- nation euro area are detracting from the policy response to the debt crisis and undermining the future of the European Union. “The tensions that have accompanied the euro zone in the past years are already showing signs of a psychological dissolution of Europe,” Monti told Der Spiegel. While he backed the ECB’s willingness to address “severe malfunctioning” in the government bond market, Monti said the problems “have to be solved quickly now so that there’s no further uncertainty about the euro zone’s ability to overcome the crisis.”
Spain and Italy, whose surging borrowing costs have shunted them to the heart of the turmoil in the euro area, are resisting pressure from ECB President Mario Draghi to formally request aid in return for strict conditions before the central bank will buy their bonds. Monti and Spanish Prime Minister Mariano Rajoy have both said they will await further details as the ECB works up its plan. The German government said for the first time today that Chancellor Angela Merkel supports Draghi’s proposals.
Draghi Echoing Merkel Has Trader Raise Bets Against Euro (Source:Bloomberg)
When European Central Bank President Mario Draghi vowed July 26 to do “whatever it takes” to defend the euro, he succeeded in stemming a slide that pushed the 17- nation currency down about 6 percent since late March against its major counterparts. Traders in the options market responded by raising bets against the currency of the developed world’s worst-performing economy by the most in 11 weeks. Options to protect against further weakness climbed in the past two weeks by the biggest amount since May. Between Jan. 12, 2011, when German Chancellor Angela Merkel vowed to do “whatever is needed to support the euro” and Draghi’s almost-identical pledge, Portugal, Spain and Cyprus sought bailouts and the region’s $13 trillion economy teetered on recession. Growth will trail its Group-of-10 peers through at least 2014, according to Bloomberg surveys, as companies from Siemens AG, Europe’s largest engineering company, to sporting- goods maker Puma SE cut their outlooks.
“Whatever the ECB does, it can’t conjure growth out of nowhere,” Frances Hudson, a global strategist at Standard Life Investments in Edinburgh, said in a telephone interview on Aug. 2. “The euro could go down further. The markets are not really willing to give them the benefit of the doubt anymore.”
The appetite for risk was limited on Monday following relief buying on Friday triggered by a stronger-than-expected NFP report. The foreign currencies made little progress after the European and commodity currencies soared on Friday. The US stock indexes accumulated small gains. The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the yen. Good luck!
Asian Stocks Gain on Europe Central Bank Bond-Buying Plan (Source:Bloomberg)
Asian stocks rose, with the regional benchmark index headed for its highest close in three months, after Germany backed the European Central Bank’s bond-buying plan, boosting the outlook for Asia-Pacific exporters. Esprit Holdings Ltd. (330), a clothier that counts Europe as its largest market, gained 25 percent in Hong Kong after it named a new chief executive officer. BHP Billiton Ltd., the world’s biggest miner, rose 0.5 percent in Sydney after metal prices increased. Toshiba Corp., which makes semi-conductors and parts for nuclear reactors, advanced 3.5 percent in Tokyo as it was raised to outperform at CLSA Asia Pacific Markets. Japanese utilities gained as they rebounded from last month’s plunge. The MSCI Asia Pacific Index (MXAP) rose 0.6 percent to 119.78 as of 3:30 p.m. in Tokyo, with about five stocks rising for every two that that fell in the measure, which is headed for its highest close since May 9.
“Investors are hoping that Spain won’t request a full bailout,” said Stan Shamu, a market strategist at IG Markets Ltd. in Melbourne, a provider of trading services in stocks, bonds and commodities. “That would clear the way for the ECB to buy bonds in the secondary market. That’s still the main issue.” Japan’s Nikkei 225 Stock Average (NKY) rose 0.9 percent, while South Korea’s Kospi Index added 0.1 percent. Australia’s S&P/ASX 200 Index advanced 0.5 percent as the nation’s central bank kept interest rates unchanged today. New Zealand’s NZX 50 Index gained 0.6 percent.
Japan’s Nikkei 225 Reaches Month High on ECB Bond Plan (Source:Bloomberg)
Japanese stocks gained for a second day, with the Nikkei 225 Stock Average (NKY) closing at a four-week high, amid optimism Germany will support the European Central Bank’s bond-buying plan to ease the region’s debt crisis. Brother Industries Ltd. (6448), a maker of office equipment that relies on Europe for almost 30 percent of its sales, jumped 4.3 percent. Nippon Paint Co. soared 4.9 percent after boosting its earnings forecast. Sharp Corp. rebounded from a 37-year low yesterday on speculation Foxconn Technology Group would follow through with its investment in the electronics maker. Kansai Electric Power Co., which has plunged 29 percent in the past 30 days, gained 10 percent. The Nikkei 225 Stock Average rose 0.9 percent to 8,803.31 at 3 p.m. in Tokyo, the highest close since July 11, with volume 7.6 percent below the 30-day average ahead of the Bank of Japan’s meeting tomorrow. The broader Topix Index gained 1.1 percent to 743.70. More than two shares rose for each that fell.
“There are expectations that the ECB’s bond-purchasing plan will ease debt crisis tensions, bolstering markets,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “Earnings are just so-so on the whole. Some technology companies have been hurt by the stronger yen but I don’t have an impression that their earnings are very bad.”
China’s Stocks Swing Between Gains, Losses on Profit Concern (Source:Bloomberg)
China’s stocks swung between gains and losses as concern the slowing economy will hurt profit growth overshadowed support by German Chancellor Angela Merkel’s government for the European Central Bank’s bond-buying plan. China Life Insurance Co. slid to a one-week low after estimating first-half net income fell by a “relatively large degree.” Southwest Securities Co. declined 2.6 percent after ending a plan to acquire a rival brokerage because of falling stock prices and lower earnings. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. led gains among rare earth stocks after China National Radio reported the country plans to shut down about a fifth of existing industry production capacity.
The Shanghai Composite Index slid less than 0.1 percent to 2,154.39 at 1:02 p.m. local time. The CSI 300 Index (SHSZ300) was little changed at 2,385.31. The Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong advanced 0.4 percent. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, added 3.1 percent. “There are still expectations company earnings will fall,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “However, sentiment towards Europe has improved. Previously, investors expected the worst for Europe. With a little progress now, people are getting a tad more optimistic.”
U.S. Stocks Rise on Europe as Earnings Beat Estimates (Source:Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index to a three-month high, as German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan and earnings beat forecasts. Bank of America Corp. (BAC), Caterpillar Inc. (CAT) and Alcoa Inc. (AA) jumped at least 1.8 percent to pace advances among the largest U.S. companies. Best Buy Co. (BBY) surged 12 percent as founder Richard Schulze offered to take the electronics retailer private. Regions Financial Corp. (RF) added 1.9 percent after Bank of America Corp. raised its recommendation on the shares. Knight Capital Group Inc. (KCG), the firm driven to the brink of bankruptcy by trading losses last week, tumbled 21 percent.
About five stocks advanced for every two falling on U.S. exchanges at 12:41 p.m. New York time. The S&P 500 (SPX) rose 0.5 percent to 1,398.38. The Dow Jones Industrial Average added 76.48 points, or 0.6 percent, to 13,172.65. Trading in S&P 500 companies was down 15 percent from the 30-day average at this time of day. “There’s better general feeling,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a phone interview. “We’ve had a good earnings season and better than estimated data last week. The weekend didn’t bring any painful news out of Europe and there are expectations the ECB will buy bonds.”
European Stock Futures Little Changed; Asian Stocks Rise (Source:Bloomberg)
European (SXXP) stock-index futures were little changed before reports on factory orders in Germany and Italian economic growth. U.S. index futures were also little changed, while Asian stocks advanced. Standard Chartered (STAN) Plc may drop in London, following losses in Asia, after a U.S. regulator said the lender faces suspension of business activities because of transactions with Iranian banks. Deutsche Telekom AG (DTE) may be active after people familiar with the matter said it may bid for PrimaCom Berlin GmbH. Xstrata Plc (XTA), target of a $27 billion takeover bid by Glencore International Plc, may be active after reporting first-half profit that beat analyst estimates. Futures on the Euro Stoxx 50 Index, a benchmark for the euro region, fell 0.2 percent to 2,393 at 7:05 a.m. in London. Futures on the U.K.’s FTSE 100 Index (UKX) also lost 0.2 percent to 5,760. Futures on the Standard & Poor’s 500 Index dropped less than 0.1 percent, while the MSCI Asia Pacific Index increased 0.6 percent.
The Stoxx 600 Index climbed yesterday, extending a four- month high, as Greece and its creditors agreed on the need to strengthen policy efforts to meet bailout conditions and support economic growth. The benchmark measure has climbed 13 percent over the past nine weeks as policy makers eased repayment terms for Spanish banks and optimism grew that central banks will announce stimulus measures.
Most Emerging Stocks Rise After Germany Backs ECB Plan (Source:Bloomberg)
Most emerging-market stocks advanced as Germany’s support for the European Central Bank’s bond-buying plan overshadowed concerns slowing economies will hurt company earnings. China Rongsheng Heavy Industries Group Holdings Ltd. (1101), the country’s biggest shipbuilder outside state control, surged 12 percent in Hong Kong on speculation orders will increase as concerns ease about Europe’s debt crisis, according to UOB-Kay Hian Holdings Ltd. China ZhengTong Auto Services Holdings Ltd. (1728) rose the most in almost two months after Value Partners Group Ltd. raised its stake in the auto retailer. HTC Corp. (2498) tumbled 7 percent in Taipei, extending yesterday’s 6.9 percent slump, after forecasting revenue that missed analysts’ estimates.
The MSCI Emerging Markets Index rose less than 0.1 percent to 967.54 at 1:07 p.m. in Hong Kong with 297 stocks gaining and 188 falling. German Chancellor Angela Merkel backed a bond- buying plan announced last week by the ECB, a spokesman said yesterday, fanning speculation the monetary authority will act to cut borrowing costs for Spain and Italy. The 21 nations in the MSCI emerging market gauge send about 30 percent of their exports to the European Union on average, data compiled by the World Trade Organization show. “Germany’s support is very crucial as it’s the biggest economy in Europe,” said Akbar Syarief, a fund manager overseeing about $359 million at PT MNC Asset Management in Jakarta. Meanwhile, “a lot of companies have earnings that don’t meet expectations. Overseas demand is low.”
Treasuries Snap Loss After Bernanke Notes ‘Struggle’ (Source:Bloomberg)
Treasuries snapped a two-day decline after Federal Reserve Chairman Ben S. Bernanke said people are struggling economically, fueling speculation he is open to increasing bond purchases to spur growth. Treasuries returned 6.8 percent in the 12 months to yesterday, based on Bank of America Merrill Lynch data, reflecting demand for U.S. debt as a haven from slowing economic growth and Europe’s debt crisis. The rally was interrupted this month after a U.S. report Aug. 3 showed the nation added more jobs than economists projected. The government is scheduled to sell $32 billion of three-year notes today, $24 billion of 10- year debt tomorrow and $16 billion of 30-year bonds on Aug. 9. “If Bernanke thinks they should do something to support the economy, it will put downward pressure on yields,” said Kei Katayama, who buys U.S. government debt in Tokyo for Daiwa SB Investments Ltd., which manages the equivalent of $63.6 billion. “That makes it very difficult to sell.”
Benchmark 10-year yields were little changed at 1.57 percent as of 6:50 a.m. in London, according to Bloomberg Bond Trader prices. The record low was 1.38 percent July 25. The price of the 1.75 percent security due in May 2022 was 101 21/32 today.
Treasury Bears Submit to Fed as Bond Optimism at High (Source:Bloomberg)
Jay Mueller, who manages $3 billion of bonds for Wells Capital Management in Milwaukee, resisted buying Treasuries for four months, anticipating the Federal Reserve would drop its pledge to keep interest rates at a record low through late 2014. No more. With the economy growing at a 1.5 percent annual pace, the odds of a recession have risen to 60 percent, making 1 percent yields on 10-year notes a possibility, he said. Wells Capital’s parent, Wells Fargo & Co., boosted its Treasury holdings 32 percent to $11.5 billion in May alone, according to the latest data compiled by Bloomberg. “We’re in a low-rate environment for a long time, longer than I had thought,” Mueller said in a July 26 interview at Bloomberg headquarters in New York. “I’m finally throwing in the towel.”
So are Pioneer Investment Management Inc., Pacific Investment Management Co., Federated Investors Inc., Northern Trust Global Investments and Columbia Management Investment Advisers LLC. They are adding to holdings of Treasuries as economic growth cools. Of the 20 firms that own the most Treasuries, 16 bought more U.S. government debt during their most-recent reporting periods, Bloomberg data show.
FOREX-Euro dips on caution over debt crisis response
LONDON, Aug 6 (Reuters) - The euro fell as investors remained cautious about how effective European policymakers latest pledges of action to resolve the euro zone debt crisis would be.
"There hasn't been anything that has improved the situation in Europe ... we haven't had any concrete improvement in the situation in the euro zone," said Niels Christensen, currency strategist at Nordea in Copenhagen.
FOREX-Euro touches 1-month high on stop-loss buying
The euro hit a one-month high against the dollar as traders unwound bearish bets on the single currency after stronger-than-expected U.S. jobs data last week improved investors' appetite for risk.
"When you think about the fact that something positive will probably materialise even if it takes some time, the euro could see a bit of a rebound," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, referring to possible ECB measures.
Yen Stays Stronger Before BOJ Meeting; Aussie Near 4-Mont (Source:Bloomberg)
The yen remained stronger versus the dollar as a rally in equities worldwide spurred speculation the Bank of Japan (8301) will refrain from additional monetary easing at a policy meeting that starts tomorrow. Demand for the euro was supported after German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan as Italian Prime Minister Mario Monti called for more urgency in efforts to lower borrowing costs. The Australian dollar rose to the highest in more than four months after the nation’s Reserve Bank kept interest rates unchanged at 3.5 percent at a policy meeting today. “The Bank of Japan looks set to keep policy unchanged,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “Without any impediment from the Bank of Japan, we’ll see more of the same, that gradual grind lower in the next few sessions and coming months for dollar-yen.”
The yen was little changed at 78.28 per dollar at 6:45 a.m. in London from yesterday, when it rose 0.3 percent. The Japanese currency was at 96.99 per euro from 97.03. The 17-nation euro bought $1.2390 from $1.2401 yesterday, when it touched $1.2444, the most since July 5. Australia’s dollar reached $1.0603, the highest since March 20, before trading at $1.0581, 0.1 percent above yesterday’s close.
Aussie Dollar Touches 4-Month High as RBA Holds Rates (Source:Bloomberg)
Australia’s dollar touched its highest level in more than four months after the Reserve Bank kept interest rates unchanged and said current policy settings are “appropriate.” The so-called Aussie rose against most major peers after RBA Governor Glenn Stevens and his board said in a statement from Sydney the nation’s growth is close to trend. New Zealand’s currency maintained a three-day gain as Asian stocks extended a global rally, supporting demand for riskier assets. “I think the RBA hasn’t really set out a case for lowering interest rates, so I suspect that’s probably maybe a surprise to the markets,” said Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore. The overall statement “seemed to be quite bullish for the Aussie dollar.” Australia’s dollar touched $1.0603, the strongest level since March 20, before trading little changed at $1.0570 as of 4:09 p.m. in Sydney. It traded at 82.73 yen from 82.70 yesterday.
New Zealand’s dollar, nicknamed the kiwi, was also little changed at 81.97 U.S. cents, after rising 1.5 percent over the previous three trading sessions. It bought 64.17 yen from 64.16. The MSCI Asia Pacific Index of shares rose 0.6 percent, after climbing 1.8 percent yesterday.
Bank Loans at Post-Recession Peak Support U.S. Growth (Source:Bloomberg)
Banks in the U.S. are lending the most since the recession ended in June 2009, supporting an economy weighed down by 8.3 percent unemployment. Borrowing by consumers and businesses rose in the week ended July 25 to $7.1 trillion, within 2.9 percent of its October 2008 peak, according to Federal Reserve data. New lending for autos jumped to $134.3 billion in the first four months of the year, up 56 percent from the same period in 2009, according to credit bureau Equifax Inc. (EFX) The increase in lending may prevent the economy from slowing further after growth cooled to a 1.5 percent annual pace of growth in the second quarter. While the Fed last week moved closer to expanding its record stimulus, the figures on credit indicate that 43 months of near-zero interest rates may finally be giving the economy the jolt it needs, said Jim Paulsen, who helps oversee $320 billion as chief investment strategist at Wells Capital Management in Minneapolis.
“Many pieces of the credit-creation process are starting to work again,” Paulsen said. “Banks are lending, people are borrowing, housing prices are going up and a sense of normality is returning.”
Bernanke Says Economic Data May Mask Individual Suffering (Source:Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said gauges of the U.S. economy’s strength may fail to measure the suffering of individual citizens. “Even though some key aggregate metrics -- including consumer spending, disposable income, household net worth, and debt service payments -- have moved in the direction of recovery, it is clear that many individuals and households continue to struggle with difficult economic and financial conditions,” Bernanke said today in remarks prepared for a conference in Cambridge, Massachusetts. The Federal Open Market Committee said on Aug. 1 it will pump fresh stimulus if necessary into the weakening economic expansion to boost growth and reduce an unemployment rate that’s been stuck at 8 percent or higher for more than three years. Bernanke didn’t address the outlook for monetary policy or the economy, or expand on the Fed’s Aug. 1 statement. His remarks, focused on economic measurement, will be delivered via prerecorded video.
The 58-year-old Fed chief, a former Princeton professor, said economists should “increase the attention paid to microeconomic data, which better capture the diversity of experience across households and firms.” Also, researchers should “seek better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions.”
Fed Says Banks Ease Standards on Business, Consumer Loans (Source:Bloomberg)
U.S. banks are relaxing their terms on credit cards and lending for autos and commercial real estate, according to a Federal Reserve survey. “Domestic banks, on balance, continued to report having eased their lending standards across most loan types over the past three months,” the Fed said today in Washington in its quarterly survey of senior loan officers. While lending standards are tightening at branches of foreign banks, “domestic banks reported that their business had increased due to decreased competition from European banks and that they remain willing to accommodate additional such business,” the Fed said. Banks in the U.S. are lending the most since the recession ended in June 2009, supporting an economy burdened by 8.3 percent unemployment. Fed policy makers including Chairman Ben S. Bernanke weighed the results of the survey at their July 31- Aug. 1 meeting at which they said they “will provide additional accommodation as needed” to support the economy.
Monti Calls for More Crisis Urgency in ECB Crisis Standoff (Source:Bloomberg)
Italy’s Prime Minister Mario Monti warned of a potential breakup of Europe without greater urgency in efforts to lower government borrowing costs, as a standoff over European Central Bank help for Italy and Spain hardened. Monti, in an interview with Germany’s Der Spiegel magazine published yesterday, said that disagreements within the 17- nation euro area are detracting from the policy response to the debt crisis and undermining the future of the European Union. “The tensions that have accompanied the euro zone in the past years are already showing signs of a psychological dissolution of Europe,” Monti told Der Spiegel. While he backed the ECB’s willingness to address “severe malfunctioning” in the government bond market, Monti said the problems “have to be solved quickly now so that there’s no further uncertainty about the euro zone’s ability to overcome the crisis.”
Spain and Italy, whose surging borrowing costs have shunted them to the heart of the turmoil in the euro area, are resisting pressure from ECB President Mario Draghi to formally request aid in return for strict conditions before the central bank will buy their bonds. Monti and Spanish Prime Minister Mariano Rajoy have both said they will await further details as the ECB works up its plan. The German government said for the first time today that Chancellor Angela Merkel supports Draghi’s proposals. French President Francois Hollande is pushing Monti and Rajoy to request aid from Europe’s bailout fund to help ease markets and protect France from speculation, Italian newspaper la Corriere della Sera reported, without citing anyone. Monti may speak with Draghi today, the newspaper said.
Rice Hoard Offers World Respite as Food Costs Surge: Commodities (Source:Bloomberg)
At a time when droughts are driving corn and soybeans to all-time highs, farmers are set to reap a record rice crop and Thailand is building the biggest stockpile in at least five decades, helping avoid a global food crisis. The largest exporting nation bought 11 million metric tons as of July, enough to supply the six biggest importers, Commerce Ministry data show. As corn farmers from the U.S. to Ukraine endure drought, paddy fields will yield 1.1 million tons more milled grain, the U.S. Department of Agriculture predicts. Benchmark 5-percent Thai white rice will drop 14 percent to $480 a ton by Dec. 31, according to the median of 10 estimates from traders and analysts surveyed by Bloomberg.
Shipments of the staple for half the world will expand 2.6 percent to a record in 2012-2013, the USDA predicts. Those exports combined with Thailand’s stockpiles, which may be cut to clear space for the next harvest, are a buffer against grain reserves seen at the lowest in at least five years. Cheaper rice may contain global food costs the United Nations predicts will rebound, ending a retreat to a 21-month low in June. “Rice is the only bright spot which is keeping us away from a global food crisis,” said Abdolreza Abbassian, a senior economist at the UN’s Food & Agriculture Organization in Rome. “The corn situation is very worrisome, while with wheat, the overall supply situation is still adequate.”
Monti Calls for More Crisis Urgency in ECB Standoff (Source:Bloomberg)
Italy’s Prime Minister Mario Monti warned of a potential breakup of Europe without greater urgency in efforts to lower government borrowing costs, as a standoff over European Central Bank help for Italy and Spain hardened. Monti, in an interview with Germany’s Der Spiegel magazine published yesterday, said that disagreements within the 17- nation euro area are detracting from the policy response to the debt crisis and undermining the future of the European Union. “The tensions that have accompanied the euro zone in the past years are already showing signs of a psychological dissolution of Europe,” Monti told Der Spiegel. While he backed the ECB’s willingness to address “severe malfunctioning” in the government bond market, Monti said the problems “have to be solved quickly now so that there’s no further uncertainty about the euro zone’s ability to overcome the crisis.”
Spain and Italy, whose surging borrowing costs have shunted them to the heart of the turmoil in the euro area, are resisting pressure from ECB President Mario Draghi to formally request aid in return for strict conditions before the central bank will buy their bonds. Monti and Spanish Prime Minister Mariano Rajoy have both said they will await further details as the ECB works up its plan. The German government said for the first time today that Chancellor Angela Merkel supports Draghi’s proposals.
Draghi Echoing Merkel Has Trader Raise Bets Against Euro (Source:Bloomberg)
When European Central Bank President Mario Draghi vowed July 26 to do “whatever it takes” to defend the euro, he succeeded in stemming a slide that pushed the 17- nation currency down about 6 percent since late March against its major counterparts. Traders in the options market responded by raising bets against the currency of the developed world’s worst-performing economy by the most in 11 weeks. Options to protect against further weakness climbed in the past two weeks by the biggest amount since May. Between Jan. 12, 2011, when German Chancellor Angela Merkel vowed to do “whatever is needed to support the euro” and Draghi’s almost-identical pledge, Portugal, Spain and Cyprus sought bailouts and the region’s $13 trillion economy teetered on recession. Growth will trail its Group-of-10 peers through at least 2014, according to Bloomberg surveys, as companies from Siemens AG, Europe’s largest engineering company, to sporting- goods maker Puma SE cut their outlooks.
“Whatever the ECB does, it can’t conjure growth out of nowhere,” Frances Hudson, a global strategist at Standard Life Investments in Edinburgh, said in a telephone interview on Aug. 2. “The euro could go down further. The markets are not really willing to give them the benefit of the doubt anymore.”
20120807 1520 Global Commodities Related News.
DTN Closing Grain Comments 08/06 14:49 : Weekend Rains Pressure Soybeans(Source:CME)
Higher rain totals than expected over the weekend took soybeans sharply lower Monday, though the debate rages on how much it will help given the crop is 2 to 3 weeks ahead of schedule. Corn and wheat put up a good fight despite the weakness in beans, with the latter able to close higher.
Wheat Market Recap Report (Source:CME)
September Wheat finished up 2 at 893 1/4, 4 off the high and 16 1/2 up from the low. December Wheat closed up 2 1/2 at 906 1/4. This was 16 3/4 up from the low and 3 1/2 off the high. September Chicago wheat traded higher into the close after falling overnight on follow through from a lower corn market. KC and Minneapolis wheat traded lower on the day. The wheat market found support this morning after a private Russian consultant lowered their Russian wheat production forecast to 40.5-43 million tonnes. This was down from previous estimates of 46.5 million tonnes. Furthermore, the Russian Agriculture Ministry reportedly expects their best estimate for wheat production to be 45 million tonnes. The last USDA estimate was 49 million. Above normal heat and below normal precipitation continues to stress spring wheat areas in Russia, which is adding to the supportive trade. The United Nations' Food and Agriculture Organization said on Monday it had cut its 2012 global forecast for rice paddy production by 7.8 million tonnes to 724.5 million tonnes, due mainly to below average monsoon rains in India. This could have a positive impact on domestic usage of wheat in the coming year as major importers come to market for the cheapest available grain. Wheat export inspections for the week ending August 2nd were pegged at 20.90 million bushels vs. 18.60 million bushels last week. Current inspections stand at 14% of the current USDA estimates vs. the 5 year average of 16%. Weekly inspections continue to fall short of the 23.8 million bushels needed each week to meet the USDA estimate. September Oats closed down 4 1/2 at 373 1/2. This was 4 1/2 up from the low and 4 1/4 off the high.
Pro Farmer: After the Bell Wheat Recap(Source:CME)
Wheat futures saw two-sided trade today but a late surge of buying interest helped futures to finish high-range. Chicago wheat ended roughly 2 to 10 cents higher; Kansas City closed mixed and Minneapolis favored the downside in a choppy finish. Wheat futures saw choppy trade today, with bears having a slight advantage most of the day and into the close thanks to spillover pressure from corn and soybeans.
Corn Market Recap for 8/6/2012 (Source:CME)
September Corn finished down 7 at 803, 4 3/4 off the high and 10 up from the low. December Corn closed down 2 1/2 at 805. This was 15 3/4 up from the low and 4 3/4 off the high. December corn traded slightly lower into the close. Pressure was linked to a sharply lower soybean market after beneficial rainfall spread over 50% of the Midwest this weekend. The corn market continues to consolidate above $8.00 ahead of the USDA report on Friday where traders expect reductions to the US corn yield. Crop condition ratings for US corn are expected to decline 1-2% as temperatures have remained above normal for areas west of the Mississippi River and yields continue to fall. The US Dollar turned lower midday, offering support to the corn market. Corn export inspections for the week ending August 2nd were pegged at 19.88 million bushels vs. 21.43 million bushels last week for the 2011/12 marketing year. Current inspections stand at 89.3% of the current USDA estimates vs. the 5 year average of 89.8%. Weekly inspections continue to fall short of the 39.88 million bushels needed each week to meet the USDA estimate. September Rice finished down 0.025 at 15.95, 0.09 off the high and 0.05 up from the low.
Pro Farmer: After the Bell Corn Recap(Source:CME)
Corn futures opened lower, but trimmed losses to finish mixed. The September through May contracts ended 1 1/4 to 7 cents lower, with the rest of the market up 1/2 to 3 cents amid bull spread unwinding. Early weakness was tied to spillover from sharp losses in the soybean market, but traders trimmed losses as they realize weekend rains will do no more than stabilize the corn crop. Pressure on nearby futures was also limited by positive outside markets.
GRAINS-Soybeans drop on rain forecast; USDA report eyed
SYDNEY, Aug 6 (Reuters) - Chicago soybeans fell more than 2 percent, unwinding last week's gains, on forecasts for light rain in some regions of the drought-battered U.S. Midwest over the coming days.
"There's cooler weather and a little bit of light rain forecast, which I think is keeping the market a bit depressed," Andrew Woodhouse, a Sydney-based analyst at Advance Trading Australasia said.
FAO cuts global rice output forecast for 2012
ROME, Aug 6 (Reuters) - The United Nations' Food and Agriculture Organisation said on Monday it had cut its 2012 global forecast for rice paddy production by 7.8 million tonnes to 724.5 million tonnes, due mainly to below average monsoon rains in India.
A 22 percent lower than average monsoon rainfall in India through mid-July is likely to reduce output in the country this season, FAO said. Production forecasts have also been cut for countries including Cambodia and Nepal.
Grain yields halved in part of Russia's Volga Valley
BOLSHIE KLYUCHISHCHI, Russia, Aug 6 (Reuters) - Farmers in this drought stricken Russian province are used to shipping grain down the Volga River as far afield as Iran but this year yields have halved, sending up local prices and prompting farms to hold onto grain in hope of further gains.
The Ulyanovsk region harvested 1.3 million tonnes of grains in 2011, exporting a million tonnes of that.
Saudi Arabia buys hard wheat from U.S., Australia, EU
JEDDAH, Saudi Arabia, Aug 5 (Reuters) - Saudi Arabia's grains authority bought 290,000 tonnes of hard wheat from North and South America, the European Union and Australia for shipment in October and November, the Saudi Grain Silos and Flour Mills Organisation said in an emailed statement on Sunday.
"Saudi Arabia has bought 290,000 tonnes of hard wheat (12.5 percent protein) from the EU, Australia, North and South America (Seller options) for October and November shipments," it said.
Informa cuts forecasts for US 2012 corn, soy production
CHICAGO, Aug 3 (Reuters) - Private analytics firm Informa Economics expects the U.S. government to lower its U.S. 2012 corn yield estimate to 120.7 bushels per acre (bpa) next week, but the firm also said in a note to clients on Friday that it expected a "most likely final" corn yield of 131.0 bpa.
Similarly, Informa said it expected the U.S. Department of Agriculture next week to cut its U.S. 2012 corn production forecast to 10.338 billion bushels, but the firm pegged final U.S. corn production at 11.224 billion bushels.
Hail hammers Saskatchewan, Alberta crops
WINNIPEG, Manitoba, Aug 3 (Reuters) - Hail pounded crops in Saskatchewan and Alberta during the past two weeks, likely causing significant damage in Canada's two biggest wheat- and canola-growing provinces, a report said.
Saskatchewan has had hail nearly every night in the past two weeks, with insurance claims totaling more than 7,600, ahead of the five-year average and last year's pace, the Canadian Crop Hail Association said.
Texas feedlots buy HRW wheat from Canada
Aug 3 (Reuters) - Texas cattle feedlots purchased 45,000 tonnes of hard red winter wheat from Canada in recent days due to tight supplies of feed corn and its record-high prices, United States and Canadian trade sources said on Friday.
In the past two weeks, Canadian exporters sold as many as 500 rail cars of wheat for shipment into the No. 1 U.S. cattle state of Texas, the sources said.
SOFTS-Sugar dips, cocoa falls, eyes on weather
LONDON, Aug 6 (Reuters) - Raw sugar futures on ICE eased, weighed by harvest pressure in Brazil, while cocoa fell in a technically driven correction, pressured by a firmer dollar. Arabica coffee futures edged higher, with upside potential capped by harvesting in Brazil. A key focus of the softs markets was weather in Brazil, the world's top sugar and coffee producer, and in West Africa, the main cocoa growing region. Dry weather in West Africa could erode output prospects, dealers said.
Speculators switch to net short cotton position-CFTC
Aug 3 (Reuters) - Speculators turned net short in cotton contracts on ICE Futures U.S. for the first time since mid-June, in the week to July 31, when the futures market hit a one-month low, U.S. Commodity Futures Trading Commission data showed on Friday.
The noncommercial dealers cut 3,948 cotton futures and options, causing it to switch to a net short position of a slight 255 contracts, the data showed.
Cotton Crop in India to Tumble as Dry Weather Hurts Crops (Source:Bloomberg)
The cotton harvest in India, the world’s second-biggest grower, is poised to decline as the worst monsoon since 2009 parches fields and curbs planting, potentially cutting exports for the first time in three years. Futures surged to a six-month high in Mumbai. The crop in Gujarat, the largest producer, may plunge as much as 30 percent in the harvest starting Oct. 1 from 12 million bales of 170 kilograms each a year earlier, said Hasmukhbhai Raval, chairman of the Gujarat State Cooperative Cotton Federation. The planted area in the state will probably slump by as much as 25 percent from 3 million hectares (7.4 million acres) in 2011-2012, he said. Rainfall in some parts of Gujarat is as much as 81 percent below a 50-year average as more than 50 percent of India is threatened by drought, shriveling crops from rice to cotton and oilseeds. A smaller harvest would reduce exports, helping halt a decline in New York prices, which slumped 23 percent in the past year as demand slowed in China, the biggest consumer.
“The outlook for the 2013 crop suggests global supply might be squeezed due to competition for acreage from crops like soybeans, and the weak monsoon in India,” Abah Ofon, an analyst at Standard Chartered Plc, said by e-mail. “Output is being disincentivised at current price levels and we believe global supply will be lower next year.” Global cotton production in the year that started Aug. 1 will drop to 24.878 million metric tons from a record 26.66 million tons in the year ended July 31, Birkenhead, U.K.-based industry researcher Cotlook Inc. said July 19.
Euro Coal-Prices expected to be pushed up by Colombian strike
LONDON, Aug 3 (Reuters) - European physical prompt coal saw extremely thin trading on Friday since most market players are on holiday, but analysts said that prices would likely come under upward pressure as a strike in Colombia reduced supplies to Europe.
Two of Colombia's top coal exporters -- Drummond International and Glencore's Prodeco unit -- have already cancelled some cargoes due to an 11-day strike that may give support to global prices despite an oversupplied market.
Oil Drops From Two-Week High as Investors Seek Profit After Gain (Source:Bloomberg)
Oil slid from the highest close in two weeks in New York as investors sought to profit from crude’s 5.8 percent advance in two days. Futures slipped as much as 0.5 percent after climbing 0.9 percent yesterday. Prices are declining in New York as they approach technical resistance at $92.75 a barrel, according to data compiled by Bloomberg. U.S. crude stockpiles probably fell by 1.6 million barrels last week, according to a Bloomberg News survey of nine analysts before an Energy Department report tomorrow. Tropical storm Ernesto was forecast to become a hurricane as it heads for Mexico’s Bay of Campeche. “If you come up to the topside then naturally you’re going to see people take profit,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity-markets newsletter in Sydney, who predicts West Texas Intermediate oil faces technical resistance at $92.50 a barrel.
Oil for September delivery slid as much as 42 cents to $91.78 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.91 at 2:28 p.m. Singapore time. It settled yesterday at $92.20, the highest level since July 19. Prices are 7 percent lower this year. Brent crude for September settlement was at $109.35 a barrel, down 20 cents, on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $17.45 from $17.35 yesterday.
Saudi oil price cut shows softer Asian demand
--Clyde Russell is a Reuters market analyst. The views expressed are his own--
LAUNCESTON, Australia, Aug 6 (Reuters) - Saudi Arabia's decision to cut oil prices for September loading to major customers in Asia by more than expected is probably the best sign that physical crude demand is softening.
The official selling price (OSP) of the main grade Arab Light was cut to a premium of $1.25 a barrel over the Oman-Dubai average for September, down from $2.05 for August cargoes.
OIL-Oil softens after surge; data eyed
LONDON, Aug 6 (Reuters) - Oil retreated from last week's gains, easing towards $108 a barrel as investors took profits and awaited more clues on the health of the global economy and the outlook for oil demand.
"Prices did rise quite a lot so it's probably profit-taking going on," said Michael Creed, an economist at the National Australia Bank.
Vietnam July crude oil output jumps to 1.38 mln T-min
HANOI, Aug 6 (Reuters) - Vietnam's July crude oil production rose 16 percent from a year ago to 1.38 million tonnes, or 326,000 barrels per day, the Industry and Trade Ministry estimated on Monday, slightly above an earlier government estimate of 1.31 million tonnes.
Crude oil production in the first seven months of 2012 increased 13.2 percent from the same period last year to 9.5 million tonnes, the ministry said, citing data by state oil and gas group Petrovietnam.
Many U.S. coal power plants headed for retirement(Source:CME)
Cheap, abundant natural gas, stricter air-quality rules hastening shift. About one-sixth of U.S. coal-fired power capacity is on track to be phased out by 2020 as older plants are shut down and more electricity is generated through cheaper natural gas, according to the Energy Information Administration. In a recent forecast, the EIA said an estimated 49 gigawatts of coal-burning capacity, or less than 5% of nationwide electrical capacity, will be retired over the next eight years. “Most of the generators projected to retire are older, inefficient units primarily concentrated in the Mid-Atlantic, Ohio River Valley, and Southeastern U.S. where excess electricity generation capacity currently exists,” the EIA said in the report. “Lower natural gas prices, higher coal prices, slower economic growth, and the implementation of environmental rules all play a role in the retirements,” according to the EIA, the Energy Department’s statistical arm.
Iron-Ore Rout Seen Curbing Commodity-Ship Losses: Freight (Source:Bloomberg)
The cheapest iron ore in 31 months and the lowest shipping costs on record are poised to increase the number of cargoes going to China, curbing losses for vessel owners enduring a seven-month run of unprofitable rates. Capesizes, each hauling about 160,000 metric tons of cargo, will earn an average of $14,000 a day in the fourth quarter, the most in a year, the median of six analyst estimates compiled by Bloomberg shows. While that’s more than the $10,500 anticipated by forward freight agreements, handled by brokers and used to bet on future transport costs, it’s still less than the $16,700 owners need to break even. The 34 percent slump in iron-ore prices in the past year means some Chinese mines will start curbing output, according to Morgan Stanley, the U.S. bank that ships the most commodities. Declining domestic supply will spur the nation’s mills, making about 46 percent of the world’s steel, to import more of the raw material, the biggest source of cargoes for Capesizes. (GNK)
“There will be a time when Chinese traders will come back to buy iron ore,” said Philippe Van Den Abeele, the London- based managing director of Castalia Fund Management (U.K.) Ltd., an adviser to a hedge fund trading freight derivatives. “The market is bad and there are too many ships, but we should have support in commodity demand and a pick-up in rates. We believe the fourth quarter will be busy.”
Iron Ore-More downside pressure for spot prices, support seen at $110
SINGAPORE, Aug 6 (Reuters) - Sellers of iron ore cargoes to top importer China cut prices further on Monday, pointing to more downside pressure for the commodity that slid nearly 13 percent last month as Chinese steel demand soured.
But iron ore, which hit a 2-1/2 year trough of $115.20 per tonne last week, is unlikely to fall below $110, traders say, as some Chinese mills could pick up cargoes to replenish run-down stocks.
Indonesia issues more mining export permits after June slump
JAKARTA, Aug 3 (Reuters) - Indonesia has awarded mineral export permits to 55 companies since it introduced curbs on such shipments this year, a trade ministry official said on Friday, after the limits triggered a slump in June exports to key customers Japan and China.
Indonesia, a major exporter of metal ores, in May imposed new rules on mining exports, including a 20 percent export tax. To obtain export permits under the new rules miners must now be certified "clear and clean" and provide plans to process ores they dig up, ahead of a 2014 ban on unprocessed ore exports.
COLUMN-Gold trapped between soft physical demand and economic fear
LAUNCESTON, Australia, Aug 3 (Reuters) - Gold remains trapped in no man's land between hopes it will rally if Western central banks are forced to further ease monetary conditions and the reality that physical demand in Asia remains tepid.
Managed money raises gold longs, trims copper shorts
Aug 3 (Reuters) - Hedge funds and money managers sharply raised their net long position in U.S. gold and silver futures and options in the week to July 31, as price gains based on speculation of more Federal Reserve stimulus prompted speculators to boost their bullish bets.
They raised their net longs in gold by 25,071, or 35 percent, to 96,200 lots in the period, data from the Commodity Futures Trading Commission (CFTC)'s Commitments of Traders showed. The net longs marked the highest since the week of June 19.
METALS-Copper treads water underpinned by U.S. jobs data
London copper was little changed after a better-than-expected U.S. jobs report eased concern over growth in the world's biggest economy, and a fresh pledge by top metals consumer China to support growth also helped to support prices.
"Friday's lift came in part from the very positive payroll number, but the market also seems to be reassessing its slightly negative take on ECB (European Central Bank) policy," said senior commodities strategist Nick Trevethan of ANZ in Singapore.
PRECIOUS-Gold ekes out gains as U.S. data weighs on dollar
Gold inched higher, extending gains from the previous session after better-than-expected U.S. employment data lent support to risk appetite, weighing on the dollar.
"Market participants are now betting on Fed action at next month's FOMC (Federal Open Market Committee) meeting as the unemployment rate ticked up, even though the payrolls figure beat expectations," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
Weak panamax rates drag down Baltic index
Aug 3 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell further on Friday as a rise in capesize rates was offset by weakness in the panamax segment.
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 1.05 percent to 852 points. The index has fallen about 9 percent this week.
Higher rain totals than expected over the weekend took soybeans sharply lower Monday, though the debate rages on how much it will help given the crop is 2 to 3 weeks ahead of schedule. Corn and wheat put up a good fight despite the weakness in beans, with the latter able to close higher.
Wheat Market Recap Report (Source:CME)
September Wheat finished up 2 at 893 1/4, 4 off the high and 16 1/2 up from the low. December Wheat closed up 2 1/2 at 906 1/4. This was 16 3/4 up from the low and 3 1/2 off the high. September Chicago wheat traded higher into the close after falling overnight on follow through from a lower corn market. KC and Minneapolis wheat traded lower on the day. The wheat market found support this morning after a private Russian consultant lowered their Russian wheat production forecast to 40.5-43 million tonnes. This was down from previous estimates of 46.5 million tonnes. Furthermore, the Russian Agriculture Ministry reportedly expects their best estimate for wheat production to be 45 million tonnes. The last USDA estimate was 49 million. Above normal heat and below normal precipitation continues to stress spring wheat areas in Russia, which is adding to the supportive trade. The United Nations' Food and Agriculture Organization said on Monday it had cut its 2012 global forecast for rice paddy production by 7.8 million tonnes to 724.5 million tonnes, due mainly to below average monsoon rains in India. This could have a positive impact on domestic usage of wheat in the coming year as major importers come to market for the cheapest available grain. Wheat export inspections for the week ending August 2nd were pegged at 20.90 million bushels vs. 18.60 million bushels last week. Current inspections stand at 14% of the current USDA estimates vs. the 5 year average of 16%. Weekly inspections continue to fall short of the 23.8 million bushels needed each week to meet the USDA estimate. September Oats closed down 4 1/2 at 373 1/2. This was 4 1/2 up from the low and 4 1/4 off the high.
Pro Farmer: After the Bell Wheat Recap(Source:CME)
Wheat futures saw two-sided trade today but a late surge of buying interest helped futures to finish high-range. Chicago wheat ended roughly 2 to 10 cents higher; Kansas City closed mixed and Minneapolis favored the downside in a choppy finish. Wheat futures saw choppy trade today, with bears having a slight advantage most of the day and into the close thanks to spillover pressure from corn and soybeans.
Corn Market Recap for 8/6/2012 (Source:CME)
September Corn finished down 7 at 803, 4 3/4 off the high and 10 up from the low. December Corn closed down 2 1/2 at 805. This was 15 3/4 up from the low and 4 3/4 off the high. December corn traded slightly lower into the close. Pressure was linked to a sharply lower soybean market after beneficial rainfall spread over 50% of the Midwest this weekend. The corn market continues to consolidate above $8.00 ahead of the USDA report on Friday where traders expect reductions to the US corn yield. Crop condition ratings for US corn are expected to decline 1-2% as temperatures have remained above normal for areas west of the Mississippi River and yields continue to fall. The US Dollar turned lower midday, offering support to the corn market. Corn export inspections for the week ending August 2nd were pegged at 19.88 million bushels vs. 21.43 million bushels last week for the 2011/12 marketing year. Current inspections stand at 89.3% of the current USDA estimates vs. the 5 year average of 89.8%. Weekly inspections continue to fall short of the 39.88 million bushels needed each week to meet the USDA estimate. September Rice finished down 0.025 at 15.95, 0.09 off the high and 0.05 up from the low.
Pro Farmer: After the Bell Corn Recap(Source:CME)
Corn futures opened lower, but trimmed losses to finish mixed. The September through May contracts ended 1 1/4 to 7 cents lower, with the rest of the market up 1/2 to 3 cents amid bull spread unwinding. Early weakness was tied to spillover from sharp losses in the soybean market, but traders trimmed losses as they realize weekend rains will do no more than stabilize the corn crop. Pressure on nearby futures was also limited by positive outside markets.
GRAINS-Soybeans drop on rain forecast; USDA report eyed
SYDNEY, Aug 6 (Reuters) - Chicago soybeans fell more than 2 percent, unwinding last week's gains, on forecasts for light rain in some regions of the drought-battered U.S. Midwest over the coming days.
"There's cooler weather and a little bit of light rain forecast, which I think is keeping the market a bit depressed," Andrew Woodhouse, a Sydney-based analyst at Advance Trading Australasia said.
FAO cuts global rice output forecast for 2012
ROME, Aug 6 (Reuters) - The United Nations' Food and Agriculture Organisation said on Monday it had cut its 2012 global forecast for rice paddy production by 7.8 million tonnes to 724.5 million tonnes, due mainly to below average monsoon rains in India.
A 22 percent lower than average monsoon rainfall in India through mid-July is likely to reduce output in the country this season, FAO said. Production forecasts have also been cut for countries including Cambodia and Nepal.
Grain yields halved in part of Russia's Volga Valley
BOLSHIE KLYUCHISHCHI, Russia, Aug 6 (Reuters) - Farmers in this drought stricken Russian province are used to shipping grain down the Volga River as far afield as Iran but this year yields have halved, sending up local prices and prompting farms to hold onto grain in hope of further gains.
The Ulyanovsk region harvested 1.3 million tonnes of grains in 2011, exporting a million tonnes of that.
Saudi Arabia buys hard wheat from U.S., Australia, EU
JEDDAH, Saudi Arabia, Aug 5 (Reuters) - Saudi Arabia's grains authority bought 290,000 tonnes of hard wheat from North and South America, the European Union and Australia for shipment in October and November, the Saudi Grain Silos and Flour Mills Organisation said in an emailed statement on Sunday.
"Saudi Arabia has bought 290,000 tonnes of hard wheat (12.5 percent protein) from the EU, Australia, North and South America (Seller options) for October and November shipments," it said.
Informa cuts forecasts for US 2012 corn, soy production
CHICAGO, Aug 3 (Reuters) - Private analytics firm Informa Economics expects the U.S. government to lower its U.S. 2012 corn yield estimate to 120.7 bushels per acre (bpa) next week, but the firm also said in a note to clients on Friday that it expected a "most likely final" corn yield of 131.0 bpa.
Similarly, Informa said it expected the U.S. Department of Agriculture next week to cut its U.S. 2012 corn production forecast to 10.338 billion bushels, but the firm pegged final U.S. corn production at 11.224 billion bushels.
Hail hammers Saskatchewan, Alberta crops
WINNIPEG, Manitoba, Aug 3 (Reuters) - Hail pounded crops in Saskatchewan and Alberta during the past two weeks, likely causing significant damage in Canada's two biggest wheat- and canola-growing provinces, a report said.
Saskatchewan has had hail nearly every night in the past two weeks, with insurance claims totaling more than 7,600, ahead of the five-year average and last year's pace, the Canadian Crop Hail Association said.
Texas feedlots buy HRW wheat from Canada
Aug 3 (Reuters) - Texas cattle feedlots purchased 45,000 tonnes of hard red winter wheat from Canada in recent days due to tight supplies of feed corn and its record-high prices, United States and Canadian trade sources said on Friday.
In the past two weeks, Canadian exporters sold as many as 500 rail cars of wheat for shipment into the No. 1 U.S. cattle state of Texas, the sources said.
SOFTS-Sugar dips, cocoa falls, eyes on weather
LONDON, Aug 6 (Reuters) - Raw sugar futures on ICE eased, weighed by harvest pressure in Brazil, while cocoa fell in a technically driven correction, pressured by a firmer dollar. Arabica coffee futures edged higher, with upside potential capped by harvesting in Brazil. A key focus of the softs markets was weather in Brazil, the world's top sugar and coffee producer, and in West Africa, the main cocoa growing region. Dry weather in West Africa could erode output prospects, dealers said.
Speculators switch to net short cotton position-CFTC
Aug 3 (Reuters) - Speculators turned net short in cotton contracts on ICE Futures U.S. for the first time since mid-June, in the week to July 31, when the futures market hit a one-month low, U.S. Commodity Futures Trading Commission data showed on Friday.
The noncommercial dealers cut 3,948 cotton futures and options, causing it to switch to a net short position of a slight 255 contracts, the data showed.
Cotton Crop in India to Tumble as Dry Weather Hurts Crops (Source:Bloomberg)
The cotton harvest in India, the world’s second-biggest grower, is poised to decline as the worst monsoon since 2009 parches fields and curbs planting, potentially cutting exports for the first time in three years. Futures surged to a six-month high in Mumbai. The crop in Gujarat, the largest producer, may plunge as much as 30 percent in the harvest starting Oct. 1 from 12 million bales of 170 kilograms each a year earlier, said Hasmukhbhai Raval, chairman of the Gujarat State Cooperative Cotton Federation. The planted area in the state will probably slump by as much as 25 percent from 3 million hectares (7.4 million acres) in 2011-2012, he said. Rainfall in some parts of Gujarat is as much as 81 percent below a 50-year average as more than 50 percent of India is threatened by drought, shriveling crops from rice to cotton and oilseeds. A smaller harvest would reduce exports, helping halt a decline in New York prices, which slumped 23 percent in the past year as demand slowed in China, the biggest consumer.
“The outlook for the 2013 crop suggests global supply might be squeezed due to competition for acreage from crops like soybeans, and the weak monsoon in India,” Abah Ofon, an analyst at Standard Chartered Plc, said by e-mail. “Output is being disincentivised at current price levels and we believe global supply will be lower next year.” Global cotton production in the year that started Aug. 1 will drop to 24.878 million metric tons from a record 26.66 million tons in the year ended July 31, Birkenhead, U.K.-based industry researcher Cotlook Inc. said July 19.
Euro Coal-Prices expected to be pushed up by Colombian strike
LONDON, Aug 3 (Reuters) - European physical prompt coal saw extremely thin trading on Friday since most market players are on holiday, but analysts said that prices would likely come under upward pressure as a strike in Colombia reduced supplies to Europe.
Two of Colombia's top coal exporters -- Drummond International and Glencore's Prodeco unit -- have already cancelled some cargoes due to an 11-day strike that may give support to global prices despite an oversupplied market.
Oil Drops From Two-Week High as Investors Seek Profit After Gain (Source:Bloomberg)
Oil slid from the highest close in two weeks in New York as investors sought to profit from crude’s 5.8 percent advance in two days. Futures slipped as much as 0.5 percent after climbing 0.9 percent yesterday. Prices are declining in New York as they approach technical resistance at $92.75 a barrel, according to data compiled by Bloomberg. U.S. crude stockpiles probably fell by 1.6 million barrels last week, according to a Bloomberg News survey of nine analysts before an Energy Department report tomorrow. Tropical storm Ernesto was forecast to become a hurricane as it heads for Mexico’s Bay of Campeche. “If you come up to the topside then naturally you’re going to see people take profit,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity-markets newsletter in Sydney, who predicts West Texas Intermediate oil faces technical resistance at $92.50 a barrel.
Oil for September delivery slid as much as 42 cents to $91.78 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.91 at 2:28 p.m. Singapore time. It settled yesterday at $92.20, the highest level since July 19. Prices are 7 percent lower this year. Brent crude for September settlement was at $109.35 a barrel, down 20 cents, on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $17.45 from $17.35 yesterday.
Saudi oil price cut shows softer Asian demand
--Clyde Russell is a Reuters market analyst. The views expressed are his own--
LAUNCESTON, Australia, Aug 6 (Reuters) - Saudi Arabia's decision to cut oil prices for September loading to major customers in Asia by more than expected is probably the best sign that physical crude demand is softening.
The official selling price (OSP) of the main grade Arab Light was cut to a premium of $1.25 a barrel over the Oman-Dubai average for September, down from $2.05 for August cargoes.
OIL-Oil softens after surge; data eyed
LONDON, Aug 6 (Reuters) - Oil retreated from last week's gains, easing towards $108 a barrel as investors took profits and awaited more clues on the health of the global economy and the outlook for oil demand.
"Prices did rise quite a lot so it's probably profit-taking going on," said Michael Creed, an economist at the National Australia Bank.
Vietnam July crude oil output jumps to 1.38 mln T-min
HANOI, Aug 6 (Reuters) - Vietnam's July crude oil production rose 16 percent from a year ago to 1.38 million tonnes, or 326,000 barrels per day, the Industry and Trade Ministry estimated on Monday, slightly above an earlier government estimate of 1.31 million tonnes.
Crude oil production in the first seven months of 2012 increased 13.2 percent from the same period last year to 9.5 million tonnes, the ministry said, citing data by state oil and gas group Petrovietnam.
Many U.S. coal power plants headed for retirement(Source:CME)
Cheap, abundant natural gas, stricter air-quality rules hastening shift. About one-sixth of U.S. coal-fired power capacity is on track to be phased out by 2020 as older plants are shut down and more electricity is generated through cheaper natural gas, according to the Energy Information Administration. In a recent forecast, the EIA said an estimated 49 gigawatts of coal-burning capacity, or less than 5% of nationwide electrical capacity, will be retired over the next eight years. “Most of the generators projected to retire are older, inefficient units primarily concentrated in the Mid-Atlantic, Ohio River Valley, and Southeastern U.S. where excess electricity generation capacity currently exists,” the EIA said in the report. “Lower natural gas prices, higher coal prices, slower economic growth, and the implementation of environmental rules all play a role in the retirements,” according to the EIA, the Energy Department’s statistical arm.
Iron-Ore Rout Seen Curbing Commodity-Ship Losses: Freight (Source:Bloomberg)
The cheapest iron ore in 31 months and the lowest shipping costs on record are poised to increase the number of cargoes going to China, curbing losses for vessel owners enduring a seven-month run of unprofitable rates. Capesizes, each hauling about 160,000 metric tons of cargo, will earn an average of $14,000 a day in the fourth quarter, the most in a year, the median of six analyst estimates compiled by Bloomberg shows. While that’s more than the $10,500 anticipated by forward freight agreements, handled by brokers and used to bet on future transport costs, it’s still less than the $16,700 owners need to break even. The 34 percent slump in iron-ore prices in the past year means some Chinese mines will start curbing output, according to Morgan Stanley, the U.S. bank that ships the most commodities. Declining domestic supply will spur the nation’s mills, making about 46 percent of the world’s steel, to import more of the raw material, the biggest source of cargoes for Capesizes. (GNK)
“There will be a time when Chinese traders will come back to buy iron ore,” said Philippe Van Den Abeele, the London- based managing director of Castalia Fund Management (U.K.) Ltd., an adviser to a hedge fund trading freight derivatives. “The market is bad and there are too many ships, but we should have support in commodity demand and a pick-up in rates. We believe the fourth quarter will be busy.”
Iron Ore-More downside pressure for spot prices, support seen at $110
SINGAPORE, Aug 6 (Reuters) - Sellers of iron ore cargoes to top importer China cut prices further on Monday, pointing to more downside pressure for the commodity that slid nearly 13 percent last month as Chinese steel demand soured.
But iron ore, which hit a 2-1/2 year trough of $115.20 per tonne last week, is unlikely to fall below $110, traders say, as some Chinese mills could pick up cargoes to replenish run-down stocks.
Indonesia issues more mining export permits after June slump
JAKARTA, Aug 3 (Reuters) - Indonesia has awarded mineral export permits to 55 companies since it introduced curbs on such shipments this year, a trade ministry official said on Friday, after the limits triggered a slump in June exports to key customers Japan and China.
Indonesia, a major exporter of metal ores, in May imposed new rules on mining exports, including a 20 percent export tax. To obtain export permits under the new rules miners must now be certified "clear and clean" and provide plans to process ores they dig up, ahead of a 2014 ban on unprocessed ore exports.
COLUMN-Gold trapped between soft physical demand and economic fear
LAUNCESTON, Australia, Aug 3 (Reuters) - Gold remains trapped in no man's land between hopes it will rally if Western central banks are forced to further ease monetary conditions and the reality that physical demand in Asia remains tepid.
Managed money raises gold longs, trims copper shorts
Aug 3 (Reuters) - Hedge funds and money managers sharply raised their net long position in U.S. gold and silver futures and options in the week to July 31, as price gains based on speculation of more Federal Reserve stimulus prompted speculators to boost their bullish bets.
They raised their net longs in gold by 25,071, or 35 percent, to 96,200 lots in the period, data from the Commodity Futures Trading Commission (CFTC)'s Commitments of Traders showed. The net longs marked the highest since the week of June 19.
METALS-Copper treads water underpinned by U.S. jobs data
London copper was little changed after a better-than-expected U.S. jobs report eased concern over growth in the world's biggest economy, and a fresh pledge by top metals consumer China to support growth also helped to support prices.
"Friday's lift came in part from the very positive payroll number, but the market also seems to be reassessing its slightly negative take on ECB (European Central Bank) policy," said senior commodities strategist Nick Trevethan of ANZ in Singapore.
PRECIOUS-Gold ekes out gains as U.S. data weighs on dollar
Gold inched higher, extending gains from the previous session after better-than-expected U.S. employment data lent support to risk appetite, weighing on the dollar.
"Market participants are now betting on Fed action at next month's FOMC (Federal Open Market Committee) meeting as the unemployment rate ticked up, even though the payrolls figure beat expectations," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
Weak panamax rates drag down Baltic index
Aug 3 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell further on Friday as a rise in capesize rates was offset by weakness in the panamax segment.
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 1.05 percent to 852 points. The index has fallen about 9 percent this week.
20120807 1519 Soy Oil & Palm Oil Related News.
Soybean Complex Market Recap (Source:CME)
August Soybeans finished down 48 3/4 at 1607 1/2, 22 1/2 off the high and 3/4 up from the low. November Soybeans closed down 44 1/2 at 1584 1/4. This was 8 1/2 up from the low and 17 1/2 off the high. August Soymeal closed down 13.3 at 518.2. This was 1.2 up from the low and 11.2 off the high. August Soybean Oil finished down 0.56 at 51.48, 0.33 off the high and 0.36 up from the low. November soybeans traded sharply lower into the close on profit taking after beneficial rainfall moved across 50% of the US Midwest over the weekend. The rainfall should relieve stress for soybeans in the northern and eastern Midwest. Conditions should remain dry in the west and southwestern Corn Belt. Yield projections continue to be mixed with areas in the east offsetting some of the yield loss in the west. Crop condition ratings are expected to decline 1-2% for good/excellent conditions this afternoon. The USDA announced this morning that private exporters sold 106,000 tonnes of soybeans to China for the 2012/13 marketing year. The bullish news was set aside after a Brazilian analyst projected 2012/13 Brazil soybean production at 78.1 million tonnes, up 17.8% from the 2011/12. Soybean export inspections for the week ending August 2nd were pegged at 12.72 million bushels vs. 15.49 million bushels last week. Current inspections stand at 96.6% of the current USDA estimates vs. the 5 year average of 95.3%. Weekly inspections continue to exceed the pace needed to reach the USDA estimate. Inspections of only 10.47 million bushels are needed each week to meet the USDA goal for the 2011/12 marketing year.
Pro Farmer: After the Bell Soybean Recap(Source:CME)
Soybean futures faced pressure throughout the session and ended low-range with losses of 40-plus cents through the January contract; farther deferred months saw lighter losses. Soymeal and soyoil ended with moderate losses due to spillover pressure. Weekend rains were heavier and more widespread than expected, benefiting filling soybeans. This encouraged traders to book profits to start the week.
VEGOILS-Palm oil ends flat, Malaysia stocks data eyed
SINGAPORE, Aug 6 (Reuters) - Malaysian crude palm oil ended flat as expectations of higher stocks in No.2 producer Malaysia erased higher risk appetite on better-than-expected U.S. jobs data.
"In the near term, the upcoming MPOB's July inventory data could swell above the psychological range of 2 million tonnes," said Alan Lim Seong Chun, research analyst with Malaysia's
Kenanga Investment Bank, in a note.
August Soybeans finished down 48 3/4 at 1607 1/2, 22 1/2 off the high and 3/4 up from the low. November Soybeans closed down 44 1/2 at 1584 1/4. This was 8 1/2 up from the low and 17 1/2 off the high. August Soymeal closed down 13.3 at 518.2. This was 1.2 up from the low and 11.2 off the high. August Soybean Oil finished down 0.56 at 51.48, 0.33 off the high and 0.36 up from the low. November soybeans traded sharply lower into the close on profit taking after beneficial rainfall moved across 50% of the US Midwest over the weekend. The rainfall should relieve stress for soybeans in the northern and eastern Midwest. Conditions should remain dry in the west and southwestern Corn Belt. Yield projections continue to be mixed with areas in the east offsetting some of the yield loss in the west. Crop condition ratings are expected to decline 1-2% for good/excellent conditions this afternoon. The USDA announced this morning that private exporters sold 106,000 tonnes of soybeans to China for the 2012/13 marketing year. The bullish news was set aside after a Brazilian analyst projected 2012/13 Brazil soybean production at 78.1 million tonnes, up 17.8% from the 2011/12. Soybean export inspections for the week ending August 2nd were pegged at 12.72 million bushels vs. 15.49 million bushels last week. Current inspections stand at 96.6% of the current USDA estimates vs. the 5 year average of 95.3%. Weekly inspections continue to exceed the pace needed to reach the USDA estimate. Inspections of only 10.47 million bushels are needed each week to meet the USDA goal for the 2011/12 marketing year.
Pro Farmer: After the Bell Soybean Recap(Source:CME)
Soybean futures faced pressure throughout the session and ended low-range with losses of 40-plus cents through the January contract; farther deferred months saw lighter losses. Soymeal and soyoil ended with moderate losses due to spillover pressure. Weekend rains were heavier and more widespread than expected, benefiting filling soybeans. This encouraged traders to book profits to start the week.
VEGOILS-Palm oil ends flat, Malaysia stocks data eyed
SINGAPORE, Aug 6 (Reuters) - Malaysian crude palm oil ended flat as expectations of higher stocks in No.2 producer Malaysia erased higher risk appetite on better-than-expected U.S. jobs data.
"In the near term, the upcoming MPOB's July inventory data could swell above the psychological range of 2 million tonnes," said Alan Lim Seong Chun, research analyst with Malaysia's
Kenanga Investment Bank, in a note.
Thursday, August 2, 2012
20120802 1810 FCPO EOD Daily Chart Study.
Bollinger band reading : correction range bound little downside biased.
MACD Histogram : recovering, seller reducing exposure.
Support : 2920, 2900, 2850, 2800 level.
Resistance : 2950, 2970, 3020, 3050 level.
Comment :
FCPO closed 1 tick higher with slower volume traded. Soy oil currently rebounding higher after overnight plunged lower by more than 1.5% while crude oil price currently trading little higher.
Remained uncertain gloomy global economy after U.S. Federal Reserve refrained from implement further stimulus measure resulted crude palm oil to trade mostly in negative territory through out the day followed by last minutes recovery to closed 1 points higher.
Daily chart reading adjusted to suggesting a correction range bound little downside 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.
20120802 1734 FKLI EOD Daily Chart Study.
FKLI closed : 1638 changed : +4 points, volume : lower.
Bollinger band reading : correction range bound little upside biased.
MACD Histogram : recovering, buyer still in.
Support : 1630, 1623, 1615, 1600 level.
Resistance : 1640, 1650, 1660, 1670 level.
Comment :
FKLI closed recorded gain lesser volume changed hand doing about 5 point premium compare to cash market that edge up marginally. Overnight U.S. markets continue to retreat lower today Asia markets ended mostly lower while European markets currently trading mixed.
Disappointment over not stimulus measure announce by U.S. Federal Reserve send global market to trade lower while investors await policy announcement by the European Central Bank.
Daily technical chart analysis continue to suggesting a correction range bound little upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.
20120802 1707 Regional Markets EOD Daily Chart Study.
DJIA chart reading : pullback correction little upside biased.
Hang Seng chart reading : side way range bound.
KLCI chart reading : correction range bound little upside biased.
20120802 1625 Global Markets & Commodities Related News.
GLOBAL MARKETS: European shares were set to open a touch higher, buoyed by expectations the European Central Bank will deliver further stimulus or support to tackle the euro zone debt crisis at a meeting later in the day. Most Asian shares fell on Thursday and U.S. stocks slipped on Wednesday on disappointment that the Federal Reserve offered no new measures to stimulate the economy.
FOREX-Dollar clings to gains after Fed; all eyes on ECB
The dollar held on to gains against major currencies after the Federal Reserve refrained from offering new stimulus, leaving global investors focused on the European Central Bank meeting later on Thursday for any action that could revive their appetite for risk.
"It's really difficult to see how they are going to live up to the market's expectations," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.
FOREX: The euro edged up against the dollar while uncertainty prevailed on whether the European Central Bank will take bold action to tackle the region's debt crisis after the after the U.S. central bank held off from monetary stimulus.
FX COLUMN-Japan MOF should go for August USD/JPY buying
LONDON, Aug 1 (Reuters) - With Japan's Finance Minister Jun Azumi again saying on Wednesday that he would not rule out any possible step against excessive moves by the Japanese yen, perhaps it's time for more concrete action.
There are sound economic, political and even historical reasons why the Azumi should put his money where his mouth is and intervene to weaken the Japanese currency -- and soon.
ECB's Draghi faces leadership test over euro pledge
European Central Bank President Mario Draghi faces intense pressure from investors, European leaders and even the United States to deliver on Thursday on his pledge to do whatever it takes to save the euro.
Fed says economy may need help, keeps policy on hold
The Federal Reserve stopped short of offering new monetary stimulus on Wednesday even as it signaled more strongly that further bond buying could be in store to help a U.S. economic recovery that it said had lost momentum this year.
GRAINS: Chicago soybeans slid half a percent, falling for a third straight session as forecasts of rains in the U.S. Midwest weighed on the market, while corn inched higher on hopes of end-user demand.
Coal, iron ore, steel prices ominous indicators
Many shipping firms and bulk commodities traders have a piece of advice for anyone who thinks the world economy may be headed for an upturn soon, led by Chinese industry.
OIL: Brent crude steadied near $106 a barrel as investors looked to Europe for policy easing measures after the U.S. Federal Reserve dashed their hopes by deferring fresh monetary stimulus.
Weak China demand spurs importers to cut nickel shipments
HONG KONG, Aug 1 (Reuters) - Chinese traders are delaying term nickel imports and returning at a discount metal they had bought as China's slowing economy, and maintenance at major stainless steel mills, further cuts consumption, traders say.
China is the world's biggest consumer of nickel, which is used in making stainless steel and in other industries, and its implied consumption of nickel in the first six months of the year is down by 11.3 percent from a year ago to 157,346 tonnes.
LME gears up for warehouse deliveries review
LONDON, Aug 1 (Reuters) - The London Metal Exchange (LME) has taken the first step to carry out a formal review into deliveries from the warehouses it monitors, it said on Wednesday, as it mandated a new daily out-flow rate for nickel and tin.
The LME's warehousing operations have been dogged by controversy since big banks and trading houses including Goldman Sachs and JP Morgan Chase bought warehousing operations.
BASE METALS: London copper rose, rebounding from near one-week lows hit in the previous session as investors looked to Europe for more easing measures after the U.S. Federal Reserve dashed hopes by deferring fresh monetary stimulus.
PRECIOUS METALS: Gold found support at $1,600 an ounce, although was capped by uncertainty on whether the European Central Bank will take bold action to tackle the region's debt crisis after the U.S. central bank dashed hopes of any imminent stimulus.
METALS-LME copper climbs as markets eye ECB easing
London copper rose, rebounding from near one-week lows hit in the previous session as investors looked to Europe for more easing measures after the U.S. Federal Reserve dashed hopes by deferring fresh monetary stimulus.
"I don't see the market going anywhere for the moment. The market is still waiting for the ECB today and U.S. jobs data tomorrow. But the situation here is still very bearish," Shanghai-based commodities analyst Judy Zhu of Standard Chartered said.
PRECIOUS-Gold steady after drop on Fed, eyes on ECB
Gold found support at $1,600 an ounce, although it was capped by uncertainty over whether the European Central Bank will take bold action to tackle the region's debt crisis after the U.S. central bank dashed hopes of any imminent stimulus.
"Investors took profit yesterday after the Fed meeting. If the ECB announces any helpful measures, it will likely pressure the dollar and help the gold," said Lynette Tan, an analyst at Phillip Futures in Singapore.
FOREX-Dollar clings to gains after Fed; all eyes on ECB
The dollar held on to gains against major currencies after the Federal Reserve refrained from offering new stimulus, leaving global investors focused on the European Central Bank meeting later on Thursday for any action that could revive their appetite for risk.
"It's really difficult to see how they are going to live up to the market's expectations," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.
FOREX: The euro edged up against the dollar while uncertainty prevailed on whether the European Central Bank will take bold action to tackle the region's debt crisis after the after the U.S. central bank held off from monetary stimulus.
FX COLUMN-Japan MOF should go for August USD/JPY buying
LONDON, Aug 1 (Reuters) - With Japan's Finance Minister Jun Azumi again saying on Wednesday that he would not rule out any possible step against excessive moves by the Japanese yen, perhaps it's time for more concrete action.
There are sound economic, political and even historical reasons why the Azumi should put his money where his mouth is and intervene to weaken the Japanese currency -- and soon.
ECB's Draghi faces leadership test over euro pledge
European Central Bank President Mario Draghi faces intense pressure from investors, European leaders and even the United States to deliver on Thursday on his pledge to do whatever it takes to save the euro.
Fed says economy may need help, keeps policy on hold
The Federal Reserve stopped short of offering new monetary stimulus on Wednesday even as it signaled more strongly that further bond buying could be in store to help a U.S. economic recovery that it said had lost momentum this year.
GRAINS: Chicago soybeans slid half a percent, falling for a third straight session as forecasts of rains in the U.S. Midwest weighed on the market, while corn inched higher on hopes of end-user demand.
Coal, iron ore, steel prices ominous indicators
Many shipping firms and bulk commodities traders have a piece of advice for anyone who thinks the world economy may be headed for an upturn soon, led by Chinese industry.
OIL: Brent crude steadied near $106 a barrel as investors looked to Europe for policy easing measures after the U.S. Federal Reserve dashed their hopes by deferring fresh monetary stimulus.
Weak China demand spurs importers to cut nickel shipments
HONG KONG, Aug 1 (Reuters) - Chinese traders are delaying term nickel imports and returning at a discount metal they had bought as China's slowing economy, and maintenance at major stainless steel mills, further cuts consumption, traders say.
China is the world's biggest consumer of nickel, which is used in making stainless steel and in other industries, and its implied consumption of nickel in the first six months of the year is down by 11.3 percent from a year ago to 157,346 tonnes.
LME gears up for warehouse deliveries review
LONDON, Aug 1 (Reuters) - The London Metal Exchange (LME) has taken the first step to carry out a formal review into deliveries from the warehouses it monitors, it said on Wednesday, as it mandated a new daily out-flow rate for nickel and tin.
The LME's warehousing operations have been dogged by controversy since big banks and trading houses including Goldman Sachs and JP Morgan Chase bought warehousing operations.
BASE METALS: London copper rose, rebounding from near one-week lows hit in the previous session as investors looked to Europe for more easing measures after the U.S. Federal Reserve dashed hopes by deferring fresh monetary stimulus.
PRECIOUS METALS: Gold found support at $1,600 an ounce, although was capped by uncertainty on whether the European Central Bank will take bold action to tackle the region's debt crisis after the U.S. central bank dashed hopes of any imminent stimulus.
METALS-LME copper climbs as markets eye ECB easing
London copper rose, rebounding from near one-week lows hit in the previous session as investors looked to Europe for more easing measures after the U.S. Federal Reserve dashed hopes by deferring fresh monetary stimulus.
"I don't see the market going anywhere for the moment. The market is still waiting for the ECB today and U.S. jobs data tomorrow. But the situation here is still very bearish," Shanghai-based commodities analyst Judy Zhu of Standard Chartered said.
PRECIOUS-Gold steady after drop on Fed, eyes on ECB
Gold found support at $1,600 an ounce, although it was capped by uncertainty over whether the European Central Bank will take bold action to tackle the region's debt crisis after the U.S. central bank dashed hopes of any imminent stimulus.
"Investors took profit yesterday after the Fed meeting. If the ECB announces any helpful measures, it will likely pressure the dollar and help the gold," said Lynette Tan, an analyst at Phillip Futures in Singapore.
20120802 1114 Global Markets & Commodities Related News.
GLOBAL MARKETS-Shares ease after Fed inaction and ahead of ECB
TOKYO, Aug 2 (Reuters) - Asian shares eased on Thursday as investors turned increasingly cautious as hopes of stimulus action by central banks thinned ahead of a European Central Bank's meeting later in the day and after the U.S. Federal Reserve took no action a day earlier.
"Expectations (of U.S. stimulus) weren't high but the market can't help but feel at least a little disappointed, although many investors are still willing to stay on the sidelines until the later ECB meeting provides a clearer direction," said Lee Young-gon, an analyst at Hana Daetoo Securities.
COMMODITIES-Oil up on US demand; focus on ECB as Fed disappoints
NEW YORK, Aug 1 (Reuters) - Oil closed higher on Wednesday for the first time this week after surprisingly high U.S. demand boosted crude prices, while grains markets fell as chances for rain in the U.S. Midwest snapped a drought-driven rally.
OIL-Oil ends up but pares gains after Fed statement
NEW YORK, Aug 1 (Reuters) - Oil futures ended up but off its highs in choppy trading on Wednesday after the U.S. Federal Reserve said the economy had lost some momentum but offered no new stimulus that could shore up growth and translate into higher fuel demand.
"Crude oil prices are adjusting as the Fed did not announce any new stimulus," said Dominick Chirichella, senior partner at Energy Management Institute in New York.
Erratic oil quality to play havoc with Brent in Sept
(Robert Campbell is a Reuters market analyst. The views expressed are his own)
NEW YORK, Aug 1 (Reuters) - Physical traders in the North Sea oil market are bracing for two more months of gyrating volume and quality of Forties Blend crude, a situation that some say leaves Brent exceptionally vulnerable to squeezes.
Forties typically sets the value of "Dated" Brent, which underlies the price of much of the oil traded worldwide.
NATURAL GAS-US natural gas futures end down again
NEW YORK, Aug 1 (Reuters) - U.S. natural gas futures ended lower on Wednesday on more profit taking after setting a 7-1/2-month high early the previous session and reports that some private forecasters had moderated their mid-August temperature outlooks.
"The market is correcting after the recent gains, and I think the heat is already priced in, so some people may be looking a little farther out," a Pennsylvania-based trader said, referring to the milder revisions to the 15-day forecast.
TOKYO, Aug 2 (Reuters) - Asian shares eased on Thursday as investors turned increasingly cautious as hopes of stimulus action by central banks thinned ahead of a European Central Bank's meeting later in the day and after the U.S. Federal Reserve took no action a day earlier.
"Expectations (of U.S. stimulus) weren't high but the market can't help but feel at least a little disappointed, although many investors are still willing to stay on the sidelines until the later ECB meeting provides a clearer direction," said Lee Young-gon, an analyst at Hana Daetoo Securities.
COMMODITIES-Oil up on US demand; focus on ECB as Fed disappoints
NEW YORK, Aug 1 (Reuters) - Oil closed higher on Wednesday for the first time this week after surprisingly high U.S. demand boosted crude prices, while grains markets fell as chances for rain in the U.S. Midwest snapped a drought-driven rally.
OIL-Oil ends up but pares gains after Fed statement
NEW YORK, Aug 1 (Reuters) - Oil futures ended up but off its highs in choppy trading on Wednesday after the U.S. Federal Reserve said the economy had lost some momentum but offered no new stimulus that could shore up growth and translate into higher fuel demand.
"Crude oil prices are adjusting as the Fed did not announce any new stimulus," said Dominick Chirichella, senior partner at Energy Management Institute in New York.
Erratic oil quality to play havoc with Brent in Sept
(Robert Campbell is a Reuters market analyst. The views expressed are his own)
NEW YORK, Aug 1 (Reuters) - Physical traders in the North Sea oil market are bracing for two more months of gyrating volume and quality of Forties Blend crude, a situation that some say leaves Brent exceptionally vulnerable to squeezes.
Forties typically sets the value of "Dated" Brent, which underlies the price of much of the oil traded worldwide.
NATURAL GAS-US natural gas futures end down again
NEW YORK, Aug 1 (Reuters) - U.S. natural gas futures ended lower on Wednesday on more profit taking after setting a 7-1/2-month high early the previous session and reports that some private forecasters had moderated their mid-August temperature outlooks.
"The market is correcting after the recent gains, and I think the heat is already priced in, so some people may be looking a little farther out," a Pennsylvania-based trader said, referring to the milder revisions to the 15-day forecast.
20120802 1015 Malaysia Corporate Related News.
The Master Builders Association Malaysia (MBAM) said that local cement manufacturers have decided to raise their prices of the building materials, mirroring an earlier move by Lafarge Malayan Cement Bhd. This excludes Sarawak based CMS Cement Sdn Bhd. The association said the quantum of increase varied with companies while in terms of timeline some had imposed it yesterday while the others would soon follow. The association has received complaints from its members that this is happening. The Malaysian Competition Commission (MyCC) said it has put the cement industry under its watch list and it will keep a close eye on the developments in the sector. However, so far no party had stepped forward to lodge an official compliant with the commission. Until there is an official complaint, the MyCC will not take any investigative action or presume that anti-competitive behaviour had taken place. (Star Biz)
Mudajaya secured a contract worth RM30m to construct the entrance and exit road from the North South Highway to a site at Kampung Sungai Serai in Rawang, Selangor. The job was awarded by TPPT Sdn Bhd, a company established by Bank Negara to undertake and complete the project. The project was expected to be completed within 104 weeks from Aug 2, 2012. (BMSB, Starbiz)
The Ministry of Plantation Industries and Commodities (MPIC) has reassured palm oil industry players that the latest 2m tonnes increase in the duty-free crude palm oil (CPO) export quota is only a temporary measure aimed at stock management and ensuring the remunerative prices for local palm oil producers. "We are of the view that the development of the industry has to factor in the interest of all parties, including the producers and processors," the ministry said. The increase of quota had bring cheers to the CPO producers, but instead causing discontentment among palm oil refiners. "The ministry is concerned that due to the additional time required to address this issue, the additional window to reduce stocks through CPO duty free mechanism has to be maintained," MPIC added. (StarBiz)
India raised the benchmark import price of refined, bleached and deodorized palm olein by 118% to US$1,053 a ton, the finance ministry said today. The benchmark import price, which was unchanged at US$484 a ton since 2006, will be raised to protect the domestic refining industry, K.V. Thomas, food minister said on July 19. (Bloomberg)
Kuala Lumpur Kepong Bhd (KLK) said it plans to sell up to RM1bn worth of Islamic bonds. The company said it obtained yesterday the regulatory approval for the fund-raising exercise, which comes in the form of multi-currency Islamic medium-term notes. The programme has been assigned a preliminary long-term rating of „AA1‟ or „stable‟ outlook by RAM Rating Services Bhd, KLK added. (Reuters)
MRT Corp announced that the the Sungai Buloh-Kajang MRT Line is on schedule. The project has moved from preparatory work to active construction phase, director of strategic communications and PR Amir Mahmood Razak said. Since finalisation of the Sungai Buloh-Kajang alignment in July last year, planning, design and preparatory works for construction have been in full swing, he said. So far, 33 packages worth RM15.5bn have been awarded. He said MRT Corp would announce by year-end new projects for the SBK line, which would include train purchases, V8 viaduct and construction of stations. Deadline for phase one operations of the SBK line, that runs from Sungai Buloh to Semantan, is on December 2016. “Phase two from Semantan to Kajang will be operational in July 2017,” he said. (Starbiz)
Maybank is confident of continuing its growth momentum for this year on the back of solid economic growth regionally. President and CEO Datuk Seri Abdul Wahid Omar said the countries in which the bank currently operates in - including Malaysia, Singapore, Indonesia and others in Asean - have retained very strong economic fundamentals. "In Malaysia for example, we expect full-year growth in term of gross domestic product (GDP), at about 4.4%, Singapore to grow about 3% and Indonesia about 6%." (Bernama)
U Mobile has expanded its distribution network following a partnership deal with GCH Retail Sdn Bhd, where it will expand its ditribution channels to more than 22,000 outlets nationwide. In a statement, it said the move was a strategic initiative by the telco operator to reach out to a broader consumer market and provide greater convenience to consumers. Under the deal, the U Mobile prepaid SIM packs will be available in 151 retail outlets including Giant retail outlets, Cold Storage and Mercato supermarkets in Peninsular Malaysia, Sabah and Sarawak by end this year. (Bernama)
EPF has acquired 170.01m shares in Maxis. With the share purchase, EPF‟s stake in Maxis has now enlarged to 567.58m or 7.15%. The EPF is the second-largest stakeholder in Maxis, after Binariang GSM who holds 4.87bn shares or a 65% stake. (Malaysian Reserve)
Ho Hup Construction Co Bhd has submitted a revised regularisation plan to Bursa Malaysia that includes raising RM51m in fresh capital. The revised plan entails a capital reduction of 50 sen per share, a rights issue of new irredeemable convertible preference shares with free detachable warrants, and a scheme to repay all its debtors. The company explained that the capital reduction exercise would result in a credit of RM51m, which would be used to reduced its accumulated losses of RM146.6m. These exercises are expected to be completed by February 2013. (Financial Daily)
Seaport Terminal, which has won the contest for the privatisation of the Penang Port, has unveiled plans to immediately improve the efficient of the port, and position it as a regional port serving vessels plying routes as far away as to India and China. Datuk Mohd Sidek Shaik Osman, a director of Seaport Terminal, said the company is looking at a capital investment of RM1bn by 2017. Sidek also dismissed suggestions that Seaport Terminal would reduce Penang Port to a feeder port and that employees would be laid off after the privatisation. (Financial Daily)
Silver Bird Group Bhd has filed a suit against 10 parties, including three former principal executives and its internal and external auditors. The company is claiming RM125.03m in damages from the three executives and four private companies for causing financial irregularities towards Silver Bird and its subsidiaries. As for the internal and external auditors, Silver Bird and its subsidiaries are seeking a declaration that they have breached their duties and/or obligations towards the company and are seeking damages. It named Datuk Jackson Tan Han Kook, Ching Siew Sheong, and Lai Poh Mei as the key principal executives. (Financial Daily)
KKB Engineering, which secured a RM171m contract from Pertama Ferroalloys, is setting its eyes next on a lucrative contract to be dished out by OM Materials (Sarawak) for the construction of a manganese and ferrosilicon alloy smelting plant in Samalaju Industrial Park. KKB was awarded the project‟s RM70m site earthworks contract last year. (Star Biz)
United Plantations Bhd and Oleon NV are investing US$32m (RM99.8m) to put up a new plant to produce food emulsifiers in Pulau Indah, Klang. UniOleon Sdn Bhd, their equally-owned venture company, will make and sell food emulsifiers as early as 2014. Food emulsifiers are mainly used in the bakery, dairy and confectionary industries. In a statement, United Plantations executive director Datuk Carl Bek-Nielsen said the joint venture facilitates have access to new markets. “In this project, Oleon has partnered with United Plantations, which is the driving force in Malaysia on sustainable palm oil and whose plantations all meet the criteria of the Roundtable on Sustainable Palm Oil,” he said. Oleon NV is Europe‟s largest oleochemical group with total capacity of 500,000 tonnes a year of fatty acids, esters and dimers production. It is a member of the French oilseed financial group Sofiprotéol. (BT)
Konsortium Abass to issue RM138m sukuk
Kumpulan Perangsang Selangor’s subsidiary, Konsortium Abass SB, plans to issue Islamic Bonds worth RM138m to refinance existing financing facilities. The company said it has mandated Maybank Investment Bank as the principal adviser, lead arranger and lead manager. The tenure of the sukuk is up to nine years from the date of issuance. (BT)
Amcorp unit in pact to buy London property
Amcorp Properties's wholly-owned subsidiary, Old Burlington Ltd, has entered into a shareholders' agreement with NL (Pollen) Ltd and HPL (Mayfair) Pte Ltd, to purchase a freehold property in London. In a filing to Bursa Malaysia, Amcorp Properties said following the agreement, the maximum funding commitment to be made by Old Burlington is STG23.75 million (RM117.6 million) as its share. (BT)
Mudajaya secured a contract worth RM30m to construct the entrance and exit road from the North South Highway to a site at Kampung Sungai Serai in Rawang, Selangor. The job was awarded by TPPT Sdn Bhd, a company established by Bank Negara to undertake and complete the project. The project was expected to be completed within 104 weeks from Aug 2, 2012. (BMSB, Starbiz)
The Ministry of Plantation Industries and Commodities (MPIC) has reassured palm oil industry players that the latest 2m tonnes increase in the duty-free crude palm oil (CPO) export quota is only a temporary measure aimed at stock management and ensuring the remunerative prices for local palm oil producers. "We are of the view that the development of the industry has to factor in the interest of all parties, including the producers and processors," the ministry said. The increase of quota had bring cheers to the CPO producers, but instead causing discontentment among palm oil refiners. "The ministry is concerned that due to the additional time required to address this issue, the additional window to reduce stocks through CPO duty free mechanism has to be maintained," MPIC added. (StarBiz)
India raised the benchmark import price of refined, bleached and deodorized palm olein by 118% to US$1,053 a ton, the finance ministry said today. The benchmark import price, which was unchanged at US$484 a ton since 2006, will be raised to protect the domestic refining industry, K.V. Thomas, food minister said on July 19. (Bloomberg)
Kuala Lumpur Kepong Bhd (KLK) said it plans to sell up to RM1bn worth of Islamic bonds. The company said it obtained yesterday the regulatory approval for the fund-raising exercise, which comes in the form of multi-currency Islamic medium-term notes. The programme has been assigned a preliminary long-term rating of „AA1‟ or „stable‟ outlook by RAM Rating Services Bhd, KLK added. (Reuters)
MRT Corp announced that the the Sungai Buloh-Kajang MRT Line is on schedule. The project has moved from preparatory work to active construction phase, director of strategic communications and PR Amir Mahmood Razak said. Since finalisation of the Sungai Buloh-Kajang alignment in July last year, planning, design and preparatory works for construction have been in full swing, he said. So far, 33 packages worth RM15.5bn have been awarded. He said MRT Corp would announce by year-end new projects for the SBK line, which would include train purchases, V8 viaduct and construction of stations. Deadline for phase one operations of the SBK line, that runs from Sungai Buloh to Semantan, is on December 2016. “Phase two from Semantan to Kajang will be operational in July 2017,” he said. (Starbiz)
Maybank is confident of continuing its growth momentum for this year on the back of solid economic growth regionally. President and CEO Datuk Seri Abdul Wahid Omar said the countries in which the bank currently operates in - including Malaysia, Singapore, Indonesia and others in Asean - have retained very strong economic fundamentals. "In Malaysia for example, we expect full-year growth in term of gross domestic product (GDP), at about 4.4%, Singapore to grow about 3% and Indonesia about 6%." (Bernama)
U Mobile has expanded its distribution network following a partnership deal with GCH Retail Sdn Bhd, where it will expand its ditribution channels to more than 22,000 outlets nationwide. In a statement, it said the move was a strategic initiative by the telco operator to reach out to a broader consumer market and provide greater convenience to consumers. Under the deal, the U Mobile prepaid SIM packs will be available in 151 retail outlets including Giant retail outlets, Cold Storage and Mercato supermarkets in Peninsular Malaysia, Sabah and Sarawak by end this year. (Bernama)
EPF has acquired 170.01m shares in Maxis. With the share purchase, EPF‟s stake in Maxis has now enlarged to 567.58m or 7.15%. The EPF is the second-largest stakeholder in Maxis, after Binariang GSM who holds 4.87bn shares or a 65% stake. (Malaysian Reserve)
Ho Hup Construction Co Bhd has submitted a revised regularisation plan to Bursa Malaysia that includes raising RM51m in fresh capital. The revised plan entails a capital reduction of 50 sen per share, a rights issue of new irredeemable convertible preference shares with free detachable warrants, and a scheme to repay all its debtors. The company explained that the capital reduction exercise would result in a credit of RM51m, which would be used to reduced its accumulated losses of RM146.6m. These exercises are expected to be completed by February 2013. (Financial Daily)
Seaport Terminal, which has won the contest for the privatisation of the Penang Port, has unveiled plans to immediately improve the efficient of the port, and position it as a regional port serving vessels plying routes as far away as to India and China. Datuk Mohd Sidek Shaik Osman, a director of Seaport Terminal, said the company is looking at a capital investment of RM1bn by 2017. Sidek also dismissed suggestions that Seaport Terminal would reduce Penang Port to a feeder port and that employees would be laid off after the privatisation. (Financial Daily)
Silver Bird Group Bhd has filed a suit against 10 parties, including three former principal executives and its internal and external auditors. The company is claiming RM125.03m in damages from the three executives and four private companies for causing financial irregularities towards Silver Bird and its subsidiaries. As for the internal and external auditors, Silver Bird and its subsidiaries are seeking a declaration that they have breached their duties and/or obligations towards the company and are seeking damages. It named Datuk Jackson Tan Han Kook, Ching Siew Sheong, and Lai Poh Mei as the key principal executives. (Financial Daily)
KKB Engineering, which secured a RM171m contract from Pertama Ferroalloys, is setting its eyes next on a lucrative contract to be dished out by OM Materials (Sarawak) for the construction of a manganese and ferrosilicon alloy smelting plant in Samalaju Industrial Park. KKB was awarded the project‟s RM70m site earthworks contract last year. (Star Biz)
United Plantations Bhd and Oleon NV are investing US$32m (RM99.8m) to put up a new plant to produce food emulsifiers in Pulau Indah, Klang. UniOleon Sdn Bhd, their equally-owned venture company, will make and sell food emulsifiers as early as 2014. Food emulsifiers are mainly used in the bakery, dairy and confectionary industries. In a statement, United Plantations executive director Datuk Carl Bek-Nielsen said the joint venture facilitates have access to new markets. “In this project, Oleon has partnered with United Plantations, which is the driving force in Malaysia on sustainable palm oil and whose plantations all meet the criteria of the Roundtable on Sustainable Palm Oil,” he said. Oleon NV is Europe‟s largest oleochemical group with total capacity of 500,000 tonnes a year of fatty acids, esters and dimers production. It is a member of the French oilseed financial group Sofiprotéol. (BT)
Konsortium Abass to issue RM138m sukuk
Kumpulan Perangsang Selangor’s subsidiary, Konsortium Abass SB, plans to issue Islamic Bonds worth RM138m to refinance existing financing facilities. The company said it has mandated Maybank Investment Bank as the principal adviser, lead arranger and lead manager. The tenure of the sukuk is up to nine years from the date of issuance. (BT)
Amcorp unit in pact to buy London property
Amcorp Properties's wholly-owned subsidiary, Old Burlington Ltd, has entered into a shareholders' agreement with NL (Pollen) Ltd and HPL (Mayfair) Pte Ltd, to purchase a freehold property in London. In a filing to Bursa Malaysia, Amcorp Properties said following the agreement, the maximum funding commitment to be made by Old Burlington is STG23.75 million (RM117.6 million) as its share. (BT)
20120802 1014 Local & Global Economy Related News.
Malaysia‟s public finances are weak relative to those of its „A‟ range peers and the country is now on par with more heavily indebted „A‟ range sovereigns such as Italy, said Fitch Ratings yesterday. Fitch said that despite strong GDP growth, the deterioration in public debt ratios is affecting Malaysia‟s credit profile and a lack of progress on fiscal reforms could lead to a ratings downgrade. Fitch said that the rise in the federal government debt-to-GDP ratio and the limited broadening of the fiscal revenue base have pushed Malaysia‟s debt-to-revenue ratio to 246% in 2011, which is well above the „A‟ and „BBB‟ range medians of 137% and 119% respectively and is now on par with more heavily indebted „A‟ range sovereigns such as Italy at 261% and Israel at 180%. Other factors putting pressure on the country‟s credit profile are low and energy-dependent revenues as well as structural weaknesses such as low average incomes. “Fiscal slippage or a lack of progress on fiscal reforms to reverse the deterioration in public debt ratios, following the impending election, could prompt negative rating action,” said Fitch. (Malaysian Insider)
The federal government has agreed to extend the East Coast Rail Route (ECRR) project to Bukit Besi, Dungun. Menteri Besar Datuk Seri Ahmad Said said first phase of ECRR project was originally meant to link Kuantan to Kertih, involving only 109km. "I appealed to federal government to extend it by 35km to Bukit Besi, Dungun. It was agreed at the ECERDC meeting on Tuesday,” he said. (Bernama)
The Federal Reserve downgraded its assessment of the US economy on Wednesday, saying growth had slowed, but shied away from launching a fresh round of economic stimulus. "Economic activity decelerated somewhat over the first half of this year," the Fed said following its two-day FOMC meeting. (AFP)
The US Republican-controlled House of Representatives on Wednesday passed a largely symbolic plan to extend all expiring individual income tax cuts, leaving a deep rift over tax policy unresolved until after November's elections. This comes in contrast to a rival Democratic bill passed by the Senate that would raise some tax rates on the wealthiest. (Reuters)
The US Treasury Department said it is developing a floating-rate note program that could be operational in a year or more, while it is preparing for possible negative-rate bidding. (Bloomberg)
The US MBA purchase applications index fell 2.0% wow in the 27 Jul week (-3.0% in the earlier week), whilst the refinance index gained 0.8% (2.0% in the previous week). (Bloomberg)
US domestic vehicle sales hit an annualised pace of 11.0m in Jul (10.8m in Jun), matching consensus, whilst total vehicle sales registered at an annualised 14.1m, matching Jun‟s pace and is higher than consensus of 14.0m. (Bloomberg)
US construction spending gained 0.4% mom in Jun (a revised 1.6% in May), undershooting consensus of 0.5%, whilst on a yoy basis, the measure gained 7.0%, lower than the revised 8.1% pace in May. (Bloomberg)
US ISM manufacturing unexpectedly fell to 49.8 last month (49.7 in Jun). This comes below market consensus for reading of 50.2. (Bloomberg)
US ADP employment report said that private-sector employment rose by 163,000 in Jul, slowing from a downwardly revised June gain of 172,000. The July jobs increase beat most predictions, as the average analyst estimate was that 125,000 jobs added. Gains were seen across all sizes of businesses and in both the goods-producing and service-providing sectors in July. (AFP)
The Eurozone manufacturing PMI fell to 44.0 in Jul, a three-year low, from 45.1 in Jun, with the rates of manufacturing decline in Germany, France and Spain “either at or close to the steepest since mid-2009,” according to Markit. (AFP)
The HSBC manufacturing PMI for China improved to 49.3 in Jul (48.2 in Jun). (Bloomberg)
The average price of housing in 100 major Chinese cities rose in Jul for the second straight month, suggesting that property prices have bottomed out. The survey showed the average price of housing in 100 major Chinese cities rose 0.33% mom (0.05% in Jun). (AWSJ)
China‟s manufacturing sector deteriorated slightly in Jul, as the official purchasing mangers’ index, inched down to 50.1 in Jul from 50.2 in Jun, just above the 50 line which separates expansion from contraction. (FT)
Japan must do more to shrink its massive public debt, the IMF said, but added that the nation's disaster-hit economy was recovering well despite turmoil overseas. (AFP)
The HSBC PMI for India slid to 52.9 in Jul from 55.0 the previous month, the softest reading since last November, on the back of weakening orders. (AFP)
India overturned its ban on foreign investment from Pakistan in a move designed to build goodwill amid a renewed push for a peace settlement between the nuclear-armed neighbours. (AFP)
Indonesia’s Danareksa consumer confidence index dropped 1 pt to 91.4 in Jul from 92.4 in Jun. (Bloomberg)
Indonesia’s exports in Jun slid 16.44% yoy, more than twice as bad as expected and versus an 8.55% fall in May, as shipments by value to China dropped 15.4%. Imports rose 10.7% (14.9% in May). The trade deficit widened to a record US$1.32bn. (Bloomberg, Reuters)
Indonesia’s consumer price index (CPI) rose to 4.56% yoy last month, up from 4.53% in Jun, but lower than expectations of 4.59%. (AFP)
HSBC's manufacturing purchasing managers' index for Indonesia rose to 51.4 in Jul from 50.2 in Jun. (Dow Jones)
Thailand’s Jul inflation showed a growth rate of 2.73% yoy (2.56% in Jun), up by 0.35% mom (0.16% in Jun), attributed the increase to higher food and fuel prices. (The Nation)
The HSBC manufacturing PMI for Vietnam fell to 43.6 in Jul (46.6 in Jun). (Bloomberg)
Vietnam‟s Prime Minister Nguyen Tan Dung ordered a public list of weak banks and details of lenders’ non-performing loans as the government seeks to tackle bad debt that‟s undermining the banking system and hurting businesses. (Bloomberg)
Total outstanding loans in Vietnam dong by end-July had inched up 0.93% compared with late 2011, but for the Government, this is a very low credit growth rate as it targeted credit growth of 8-10% in the banking system this year. (The Saigon Times)
Vietnam’s Ministry of Planning and Investment has written to ministries, agencies and local authorities requesting capital advances after the Government has approved to set aside VND30tr in FY13 to speed up the progress of public investment projects. (The Saigon Times)
Vietnam’s public debts are believed to have far exceeded the safety level of 60% of the country‟s gross domestic product (GDP), according to the National Assembly Economic Committee. (The Saigon Times)
The World Bank will provide a restructuring loan to help Myanmar clear US$397m in arrears by Jan, said Pamela Cox, the World Bank's vice-president for East Asia and the Pacific, who added that this needed to be done together with the Asian Development Bank. (Reuters)
Singapore’s Purchasing Managers' Index posted a reading of 49.8 last month, a drop of 0.6 points from Jun. Economists had expected an expansion to 50.4. Lower new orders at home and abroad has led to a 1.2-pt decline in electronics PMI, which posted a reading of 49.2 in Jul. (AFP)
Indonesia's foreign tourist arrivals in Jun rose 3.13% yoy, a slower pace of growth than 8.45% in May. (Reuters)
Korean exports fell 8.8% yoy in Jul, much weaker than a forecast 3.9% drop. (WSJ)
Conditions for South Korea’s manufacturers worsened for a second month in a row, according to HSBC's PMI gauge, which was at 47.2 in Jul from 49.4 in the previous month. (WSJ)
Taiwan and China are expected to forge a much-anticipated investment protection agreement in the next round of high-level talks in Aug. (AFP)
The Philippine government’s outstanding debt was expected to approach the PP5.78tr-PP5.91tr mark by the end of 2013 after breaching PP5tr recently. PP5.91tr would account for 49.5% of GDP in 2013, a lower ratio than the expected 50% this year and 50.9% in 2011. (Philippine Daily Inquirer)
The federal government has agreed to extend the East Coast Rail Route (ECRR) project to Bukit Besi, Dungun. Menteri Besar Datuk Seri Ahmad Said said first phase of ECRR project was originally meant to link Kuantan to Kertih, involving only 109km. "I appealed to federal government to extend it by 35km to Bukit Besi, Dungun. It was agreed at the ECERDC meeting on Tuesday,” he said. (Bernama)
The Federal Reserve downgraded its assessment of the US economy on Wednesday, saying growth had slowed, but shied away from launching a fresh round of economic stimulus. "Economic activity decelerated somewhat over the first half of this year," the Fed said following its two-day FOMC meeting. (AFP)
The US Republican-controlled House of Representatives on Wednesday passed a largely symbolic plan to extend all expiring individual income tax cuts, leaving a deep rift over tax policy unresolved until after November's elections. This comes in contrast to a rival Democratic bill passed by the Senate that would raise some tax rates on the wealthiest. (Reuters)
The US Treasury Department said it is developing a floating-rate note program that could be operational in a year or more, while it is preparing for possible negative-rate bidding. (Bloomberg)
The US MBA purchase applications index fell 2.0% wow in the 27 Jul week (-3.0% in the earlier week), whilst the refinance index gained 0.8% (2.0% in the previous week). (Bloomberg)
US domestic vehicle sales hit an annualised pace of 11.0m in Jul (10.8m in Jun), matching consensus, whilst total vehicle sales registered at an annualised 14.1m, matching Jun‟s pace and is higher than consensus of 14.0m. (Bloomberg)
US construction spending gained 0.4% mom in Jun (a revised 1.6% in May), undershooting consensus of 0.5%, whilst on a yoy basis, the measure gained 7.0%, lower than the revised 8.1% pace in May. (Bloomberg)
US ISM manufacturing unexpectedly fell to 49.8 last month (49.7 in Jun). This comes below market consensus for reading of 50.2. (Bloomberg)
US ADP employment report said that private-sector employment rose by 163,000 in Jul, slowing from a downwardly revised June gain of 172,000. The July jobs increase beat most predictions, as the average analyst estimate was that 125,000 jobs added. Gains were seen across all sizes of businesses and in both the goods-producing and service-providing sectors in July. (AFP)
The Eurozone manufacturing PMI fell to 44.0 in Jul, a three-year low, from 45.1 in Jun, with the rates of manufacturing decline in Germany, France and Spain “either at or close to the steepest since mid-2009,” according to Markit. (AFP)
The HSBC manufacturing PMI for China improved to 49.3 in Jul (48.2 in Jun). (Bloomberg)
The average price of housing in 100 major Chinese cities rose in Jul for the second straight month, suggesting that property prices have bottomed out. The survey showed the average price of housing in 100 major Chinese cities rose 0.33% mom (0.05% in Jun). (AWSJ)
China‟s manufacturing sector deteriorated slightly in Jul, as the official purchasing mangers’ index, inched down to 50.1 in Jul from 50.2 in Jun, just above the 50 line which separates expansion from contraction. (FT)
Japan must do more to shrink its massive public debt, the IMF said, but added that the nation's disaster-hit economy was recovering well despite turmoil overseas. (AFP)
The HSBC PMI for India slid to 52.9 in Jul from 55.0 the previous month, the softest reading since last November, on the back of weakening orders. (AFP)
India overturned its ban on foreign investment from Pakistan in a move designed to build goodwill amid a renewed push for a peace settlement between the nuclear-armed neighbours. (AFP)
Indonesia’s Danareksa consumer confidence index dropped 1 pt to 91.4 in Jul from 92.4 in Jun. (Bloomberg)
Indonesia’s exports in Jun slid 16.44% yoy, more than twice as bad as expected and versus an 8.55% fall in May, as shipments by value to China dropped 15.4%. Imports rose 10.7% (14.9% in May). The trade deficit widened to a record US$1.32bn. (Bloomberg, Reuters)
Indonesia’s consumer price index (CPI) rose to 4.56% yoy last month, up from 4.53% in Jun, but lower than expectations of 4.59%. (AFP)
HSBC's manufacturing purchasing managers' index for Indonesia rose to 51.4 in Jul from 50.2 in Jun. (Dow Jones)
Thailand’s Jul inflation showed a growth rate of 2.73% yoy (2.56% in Jun), up by 0.35% mom (0.16% in Jun), attributed the increase to higher food and fuel prices. (The Nation)
The HSBC manufacturing PMI for Vietnam fell to 43.6 in Jul (46.6 in Jun). (Bloomberg)
Vietnam‟s Prime Minister Nguyen Tan Dung ordered a public list of weak banks and details of lenders’ non-performing loans as the government seeks to tackle bad debt that‟s undermining the banking system and hurting businesses. (Bloomberg)
Total outstanding loans in Vietnam dong by end-July had inched up 0.93% compared with late 2011, but for the Government, this is a very low credit growth rate as it targeted credit growth of 8-10% in the banking system this year. (The Saigon Times)
Vietnam’s Ministry of Planning and Investment has written to ministries, agencies and local authorities requesting capital advances after the Government has approved to set aside VND30tr in FY13 to speed up the progress of public investment projects. (The Saigon Times)
Vietnam’s public debts are believed to have far exceeded the safety level of 60% of the country‟s gross domestic product (GDP), according to the National Assembly Economic Committee. (The Saigon Times)
The World Bank will provide a restructuring loan to help Myanmar clear US$397m in arrears by Jan, said Pamela Cox, the World Bank's vice-president for East Asia and the Pacific, who added that this needed to be done together with the Asian Development Bank. (Reuters)
Singapore’s Purchasing Managers' Index posted a reading of 49.8 last month, a drop of 0.6 points from Jun. Economists had expected an expansion to 50.4. Lower new orders at home and abroad has led to a 1.2-pt decline in electronics PMI, which posted a reading of 49.2 in Jul. (AFP)
Indonesia's foreign tourist arrivals in Jun rose 3.13% yoy, a slower pace of growth than 8.45% in May. (Reuters)
Korean exports fell 8.8% yoy in Jul, much weaker than a forecast 3.9% drop. (WSJ)
Conditions for South Korea’s manufacturers worsened for a second month in a row, according to HSBC's PMI gauge, which was at 47.2 in Jul from 49.4 in the previous month. (WSJ)
Taiwan and China are expected to forge a much-anticipated investment protection agreement in the next round of high-level talks in Aug. (AFP)
The Philippine government’s outstanding debt was expected to approach the PP5.78tr-PP5.91tr mark by the end of 2013 after breaching PP5tr recently. PP5.91tr would account for 49.5% of GDP in 2013, a lower ratio than the expected 50% this year and 50.9% in 2011. (Philippine Daily Inquirer)
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