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News Update!
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krisluke
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05-Apr-2011 20:08
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China ups rates 4th time since Oct, March inflation may be high
* Fighting inflation is Beijing's top priority this year
* Rate rise comes ahead of March inflation data next week * Analysts say move could suggest March inflation strong * One-year deposit rate 3.25 percent, lending 6.31 percent * Rates increased 25 basis points, effective Wednesday By Soo Ai Peng and Tony Zhou SHANGHAI/BEIJING, April 5 (Reuters) - China's central bank increased interest rates on Tuesday for the fourth time since October, raising suspicions that data next week may show inflation rose more than expected in March. The tightening of monetary policy adds to six official increases in bank reserves over the same period and follows a declaration by China's top leaders that controlling inflation was their most important task this year. Benchmark one-year deposit rates will be lifted by 25 basis points to 3.25 percent and one-year lending rates will be raised by 25 basis points to 6.31 percent, the People's Bank of China said in a statement on its website. The rises take effect from April 6. " The March inflation figures must be very high," said Xu Biao, economist with China Merchants Bank in Shenzhen. " It is an aggressive move, and the central bank is acting more aggressively than the market had expected. The latest interest rate rise, although at only one quarter point, may hurt investor confidence and the real economy quite significantly. More importantly, it is not the end of China's monetary policy tightening." China is due to report the March consumer price index on April 15. Economists expect the data to show that consumer inflation rose to 5.1 percent in March, matching a 28-month high seen in November. Inflation was 4.9 percent in February, unchanged from January. " We did expect a rate hike in April so it's not a complete surprise," said Allan von Mehren, chief analyst at Danske Bank in Copenhagen. " They are raising rates to stem the inflationary pressures in the economy. We expect another two hikes of 25 basis points each this year. We are already seeing a slowdown in the Chinese economy but they need to raise rates a couple more times. " They will still use reserve requirement increases but they also need to raise rates. I think they will use different tools (to tackle inflation)." Inflation worries are increasing globally. Most central banks in emerging markets in Asia have raised interest rates as the region emerged strongly from the global financial crisis. The European Central Bank is expected to raise interest rates on Thursday for the first time since the crisis and comments from some Federal Reserve policymakers have raised market expectations that the U.S. central bank is moving towards a tighter policy. So far, complaints among Chinese about rising prices have amounted to little more than grumbles, but serious inflation has sparked social unrest in China in the past. " This is ultimately good news because it reduces the risk of policy error in China that markets were getting nervous about," Benoit Anne, head of emerging markets strategy at Societe General, said of the rate rise. " It reduces the danger of Chinese policymakers being too dovish and shows them addressing the mounting inflation risk which is a massive tail risk for emerging markets. We will see a few more hikes as China needs more monetary tightening." The central bank boosted bank reserves, or the amount of cash that banks have to put aside, by 50 basis points to 20 percent on March 18 to lock up cash that banks could otherwise lend out and potentially fuel inflation in the world's fastest growing major economy. (Reporting by Soo Ai Peng and Tony Zhou Writing by Koh Gui Qing and Neil Fullick Editing by Dean Yates) |
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krisluke
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04-Apr-2011 22:25
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10 Things You Need To Know This MorningGood morning. Here's what you need to know.
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krisluke
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04-Apr-2011 22:20
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Wall St flat in face of strong resistance
The New York Stock Exchange seen with a Wall street sign in front
* Pfizer to sell unit to KKR for about $2.4 billion * Dow, S& P flat Nasdaq down 0.1 pct (Updates to market open, updates graphic) By Rodrigo Campos NEW YORK, April 4 (Reuters) - U.S. stocks were little changed after a higher open on Monday, with the S& P 500 facing levels where selling has clustered in recent sessions. The benchmark hovered near 1,333, a level it has been unable to close above since mid-February. That level is double the 12-year low hit in March 2009 and is not far from 1,344, the S& P's 2011 high and its highest since June 2008. " I think the market has enough inertia and the retest of 1,344 is in store," said Richard Ross, global technical strategist at Auerbach Grayson in New York. " We're looking for a marginal new high on the S& P 500 setting you up for the next leg of the advance." " If you did have a breakout which failed, those false breakouts often lead to a fast move in the opposite direction." On Friday, the S& P recorded its best two-week period since December, and the Dow industrials hit its highest intraday level since June 2008. " It wouldn't be unhealthy to see a period of consolidation in the short term, but with this kind of momentum you sometimes don't get that pause," Ross said. The Dow Jones industrial average added just 2.54 points, or 0.02 percent, to 12,379.26. The Standard & Poor's 500 edged up 0.05 point to 1,332.46. The Nasdaq Composite Index slipped 3.95 points, or 0.14 percent, to 2,785.65. The lack of significant economic data on Monday, nuclear and other quake-related problems in Japan and unrest in Libya, Syria and other states in the oil-rich region could translate into low volumes in Wall Street. Last week was the lowest in volume so far in 2011. In acquisition news, Pfizer Inc rose 0.8 percent to $20.54 after the drugmaker agreed to sell its Capsugel unit, the world's largest maker of hard capsules, to private equity firm KKR & Co for nearly $2.4 billion. (Reporting by Rodrigo Campos Editing by Kenneth Barry) |
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krisluke
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04-Apr-2011 22:05
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Pro-Gaddafi forces shelling Libya's Misrata-rebels
BEIRUT (Reuters) - Forces loyal to Libyan leader Muammar Gaddafi were shelling the rebel-held city of Misrata on Monday, targeting residential areas, a rebel spokesman said.
Misrata, Libya's third-biggest city, is the only major rebel stronghold left in the west of the country. It has been encircled and under attack by pro-Gaddafi forces for weeks and hundreds have been wounded or killed. " The shelling started in the early hours of the morning and it's continuing, using mortars and artillery. This is pure terrorism. The shelling is targeting residential areas. We know there are casualties but I don't know how many," the spokesman, called Gemal, told Reuters by telephone. He said there was also heavy shelling of the city, including the port area, on Sunday and that two people were killed. Aid ships have docked at Misrata's Mediterranean port -- which is controlled by the rebels -- to evacuate casualties, but the rebel spokesman said more help was needed. Misrata has no proper hospital and the doctors working in a makeshift clinic there say they are unable to cope with the flow of people wounded in the fighting. " The medical situation remains difficult," said Gemal. " Many more should be evacuated. We have been promised by brother states that more help is on its way." U.N.-mandated air strikes to protect civilians in Misrata have so far failed to halt attacks by the Libyan army. The rebel spokesman said the only solution was for foreign governments to help overthrow Gaddafi and his family. " Protecting civilians means removing this regime. It is the only threat to civilians," he said. Libyan officials deny attacking civilians in Misrata, saying they are fighting armed gangs linked to al Qaeda. Accounts from Misrata cannot be independently verified as Libyan authorities are not allowing journalists to report freely from there. (Reporting by Mariam Karouny Writing by Christian Lowe Editing by Matthew Jones) |
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krisluke
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04-Apr-2011 22:03
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U.S. oil hits 2.5-year high, Brent nears $120
* U.S. crude oil at its highest level since September 2008
* Iran oil minister says no need for OPEC emergency meeting * Technicals-US oil may retrace to $106.30 * Coming up: U.S. Employment Trends for March - 1400 GMT (Updates prices) By Christopher Johnson LONDON, April 4 (Reuters) - North Sea Brent crude oil hit a 2-1/2-year high of almost $120 a barrel on Monday as unrest in the Middle East and North Africa kept the focus on oil supplies as economic growth bolstered demand for fuel. Iran's oil minister said there was no need for the Organization of the Petroleum Exporting Countries to hold an extraordinary meeting, adding to price support. Iran is holder of OPEC's rotating presidency in 2011. ICE Brent rose $1.25 to a high of $119.95 a barrel, its highest since August 2008, before slipping back to trade around $119.70 by 1345 GMT. U.S. crude was up 20 cents at $108.14 a barrel by 1345 GMT, after touching $108.78 earlier in the session, its highest since September 2008. Edward Meir, senior commodity analyst at brokers MF Global, said investors seemed to be in no mood to sell the markets despite the " less than compelling fundamental backdrop" . Analysts say the loss of oil from Libya has been more or less offset by Saudi Arabia, while the Japanese crisis should also reduce oil import demand, suggesting " there likely is a statistical surplus in the system right now" , Meir said. " However, participants are not bothering with data for the moment, as the focus remains on headlines out of the Middle East. Moreover, the fact that global growth has yet to show any significant sign of decelerating is also keeping the " buy commodities" theme very much intact," he added. The government of Libya -- the world's 17th-largest oil producer and Africa's third-largest -- has sent an envoy to Greece to discuss an end to fighting, but gave no signs of any major climb down in a war that has ground to a stalemate between rebels and forces loyal to Muammar Gaddafi. NORTH SEA DELAYS Tension in the Middle East continued to support sentiment while supply disruptions elsewhere also bolstered prices. In Yemen, police using live rounds and tear gas wounded hundreds of protesters marching on a presidential palace in the Red Sea city of Hudaida on Monday in a sign of fraying nerves as the political crisis deepened. An oil workers' strike in Gabon has stopped production of around 240,000 barrels per day (bpd) of mainly low sulphur crude oil, industry sources said. And in the North Sea, loadings of benchmark Forties crude oil have been delayed by some days due to problems with the Buzzard oilfield, Britain's largest. Saudi Arabia and Kuwait both said on Monday they thought oil prices should ideally be below current levels. Farouk al-Zanki, chief executive of Kuwait Petroleum Corp, said he would like to see world oil prices decline but did not expect them to fall below $90 a barrel. He was quoted as saying $90 to $100 would be " the fair price" for crude. A Saudi official told Reuters on Monday the kingdom had not changed its view of the optimal level for oil prices and was still seeking $70 to $80 a barrel. Carsten Fritsch, analyst at Commerzbank in Frankfurt, said oil prices could fall later this year if the political situation in the Middle East allowed worries over supply to ease. " In the short-term, oil prices look very well supported," he said. " The general market sentiment is positive. But we still feel that prices will come down later this year once the supply fears have dissipated." (Additional reporting by Seng Li Peng in Singapore editing by William Hardy) |
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krisluke
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04-Apr-2011 15:46
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TEPCO told to hurry to stop radiation leaks, tries bath salts
By Yoko Kubota and Yoko Nishikawa
TOKYO (Reuters) - Japan's government Monday told the operator of the crippled Fukushima nuclear plant to move quickly to stop radiation seeping into the ocean as desperate engineers resorted to bath salts to help trace a leak from one reactor. One official has warned it could take months before the nuclear crisis caused by a March 11 earthquake and tsunami is under control. " We need to stop the spread of (contaminated water) into the ocean as soon as possible. With that strong determination, we are asking Tokyo Electric Power Co to act quickly," Chief Cabinet Secretary Yukio Edano told a news conference. He warned that accumulating radiation from a leak that has defied desperate efforts to halt it " will have a huge impact on the ocean." In the face of Japan's biggest crisis since World War Two, one newspaper poll said that nearly two-thirds of voters want the government to form a coalition with the major opposition party and work together to recover from the massive damage from the March 11 earthquake and tsunami. Underlining the concern over the impact on the world's third largest economy, a central bank survey showed that big manufacturers expect business conditions to worsen significantly in the next three months, though they were not quite as pessimistic as some analysts had expected. An aide to embattled Prime Minister Naoto Kan said on Sunday that the government's priority now was to stop radiation leaks from the Fukushima nuclear plant, 240 km (150 miles) north of Tokyo, and that the situation had " somewhat stabilised." " How long will it take to achieve (the goal of stopping the radiation leaks)? I think several months would be one target," said Goshi Hosono, a ruling party lawmaker and aide to Kan. BATH SALTS In their desperation, engineers at plant operator Tokyo Electric Power Co (TEPCO) have used anything to hand to try to stop the leaks. At the weekend, they mixed sawdust and newspapers with polymers and cement in a so far unsuccessful attempt to seal the crack in a concrete pit at reactor no.2, where radioactive water has been flowing into the sea. Monday, they resorted to powdered bath salts to produce a milky colour to help trace the source of the leak. TEPCO is planning to put some sort of curtain into the sea by the nuclear plant to try to prevent radioactive water spreading further into the ocean. It has not decided what material to use. The government has said three of the six Fukushima reactors were now generally stable. At least four will eventually be scrapped but that could take decades. en Japan's crisis has rocked the nuclear industry and the European Union said Sunday it will affect the fight against climate change as energy policies are reviewed. Germany and Switzerland have said they will shut older reactors or suspend approvals, China has suspended approvals for new plants, and Taiwan is studying cutting nuclear output. Japan may review its pledge to cut its 2020 greenhouse gas emissions by 25 percent from 1990 levels in the wake of the Fukushima nuclear power plant crisis, Japanese media quoted a senior environment ministry official as saying. " It is true that our reduction target will be affected significantly," Hideki Minamikawa, vice minister for global environmental affairs, was quoted by the Yomiuri newspaper as saying. PM UNDER PRESSURE The 9.0 magnitude quake and tsunami left nearly 28,000 people dead or missing and Japan's northeast coast a splintered wreck. The world's costliest natural disaster has hit economic production and left a damages bill which may top $300 billion (185 billion pounds). Prime Minister Kan is under intense pressure to steer Japan through the crisis, but after three weeks many Japanese are angry the humanitarian disaster seems to have taken a back seat to the nuclear crisis. Though criticised for his crisis management, voter support for Kan's government rose to 31 percent in a Yomiuri newspaper poll, from 24 percent in a survey conducted before the quake. Almost 70 percent of respondents, however, believed Kan was not exercising leadership, 19 percent wanting him to step down soon. But in a signal that many ordinary Japanese were prepared to dip into their own pockets to help, 60 percent said they would accept a hike in taxes to help fund recovery from the triple disaster. There has been talk that Kan's ruling Democratic Party of Japan join forces with its main political opponent, the Liberal Democratic Party (LDP). But so far there has been no sign the two are close to any deal. Kan last month invited LDP head Sadakazu Tanigaki to join the cabinet as deputy premier for disaster relief, but he declined. MOVES TO STOP POWER BLACKOUTS More than 163,710 people are living in shelters, with more than 70,000 people evacuated from a 20 km (12 mile) no-go zone area the nuclear plant. Another 136,000 people living a further 10 km out have been told to leave or stay indoors. The government estimates damage from the earthquake and tsunami at 16 trillion to 25 trillion yen (117 billion to 184 billion pounds). The top estimate would make it the world's costliest natural disaster. Manufacturing has slumped to a two-year low as a result of power outages and quake damage hitting supply chains and production. The Bank of Japan's tankan business sentiment survey, although negative, was not as grim as analysts had expected, With some suggesting the results were not reliable. " I think many firms will have filled out the surveys before the quake and sent them after the quake, so this reading may be misleading to gauge the impact of the quake," said Masamichi Adachi, senior economist at JPMorgan Securities Japan. General Electric, which helped build the Fukushima Daiichi nuclear power plant will help TEPCO supply electricity in the coming months when demand soars. Demand for power jumps in Japan in summer due to heavy use of air conditioners. More than 168,500 households in the north are still without electricity after the tsunami. The government has said it will restrict maximum power use by companies during the hotter months in an effort to avoid further blackouts. Japan's health ministry said Sunday it had detected radioactive substances higher than legal limits in mushrooms from Iwaki in Fukushima, said Kyodo. " Grown in Fukushima" has become a warning label for those nervous of radiation which has already been found in some vegetables close to the nuclear plant. (Additional reporting by Shinichi Saoshiro, Kiyoshi Takenaka and Yoko Kubota in Tokyo, David Fogarty in Bangkok Writing by Paul Eckert and Jonathan Thatcher) |
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krisluke
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04-Apr-2011 15:43
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Kuwait says sticks to OPEC quota, seeks lower oil price
(Adds quote, background)
KUWAIT, April 4 (Reuters) - Kuwait would like to see world oil prices decline and is currently producing in line with its OPEC quota, Farouk al-Zanki, chief executive of the country's state oil company, said on Monday. Oil prices have risen to near two-and-a-half-year highs near $119 a barrel in recent days, spurred by concerns over political instability in the Middle East and North Africa. OPEC heavyweight Saudi Arabia has boosted crude output to near 9 million barrels per day to help compensate for the loss of Libyan oil production. Asked whether Kuwait planned to boost output, Zanki said he had not yet been instructed to do so. " So far we have not been told to do that (for April)," he told reporters on the sidelines of an industry conference. Kuwait claims to hold between 600,000 and 700,000 bpd in spare production capacity, although consuming nations put the figure at about half that level. The Gulf state produced 2.42 million bpd in March, up from 2.31 million bpd in February and over its implied 2.22 million bpd OPEC quota, according to a Reuters survey. (Reporting by Eman Goma Writing by Robert Campbell Editing by Nick Macfie) |
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krisluke
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04-Apr-2011 15:42
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Brent rises above $119, U.S. oil at 2.5-yr peak
* U.S. crude rises above $108.50, highest since September 2008
* Iran oil min says no need for OPEC emergency meeting * Technicals-U.S. oil may retrace to $106.30[ID:nL3E7F4023] (Updates prices) By Seng Li Peng SINGAPORE, April 4 (Reuters) - Brent crude rose over $119 a barrel and U.S. crude hit a 2-1/2-year high on Monday at more than $108 as unrest in the Middle East and North Africa triggered concern that supplies could be dented while economic growth bolsters demand. Comments from Iran's oil minister that there was no need for OPEC to hold an extraordinary meeting to address high oil prices also supported sentiment. Iran is OPEC's leading oil price hawk and holder of the organization's rotating presidency in 2011. [ID:nHOS152087] ICE Brent < LCOc1> rose 77 cents to $119.47 a barrel at 0702 GMT, after trading as high as $119.54, near the 2-1/2-year peak of $119.79 hit on Feb. 24. U.S. crude < CLc1> was up 68 cents to $108.62 a barrel at 0702 GMT, after touching $108.74 earlier in the session -- highest since September 2008. " We have supply concerns which we haven't had for the last few years and this is mostly related to Libya now," said John Vautrain of energy consulting firm Purvin and Gertz. " The tension has disrupted crude supplies, and that is affecting Europe." The government of Libya -- the world's 17th-largest oil producer and Africa's third-largest -- sent an envoy to Greece on Sunday to discuss an end to fighting, but gave no signs of any major climbdown in a war that has ground to a stalemate between rebels and forces loyal to Muammar Gaddafi. [ID:nLDE73200M] Underlining the plight of civilians in western Libya, a Turkish ship that sailed into the besieged city of Misrata to rescue some 250 wounded had to leave in a hurry after crowds pressed forward on the dockside hoping to escape. In Yemen, two protesters died and hundreds were hurt on Sunday when police used live rounds, tear gas and batons to try to break up protests against President Ali Abdullah Saleh, who called for an end to weeks of unrest, signalling he has no intention of resigning soon. [ID:nLDE73205O] Unrest also reigned in other parts of the Middle East, with the Gulf Arab states voicing deep concern over what they called Iranian interference in their affairs after Iran objected to the despatch of Saudi troops to Bahrain and a spying row raised tensions. [ID:nLDE7320JI] Bahrain has seen the worst unrest since the 1990s after mostly Shi'ite protesters took to the streets in February, inspired by uprisings that toppled leaders in Egypt and Tunisia, to demand a bigger say in the Sunni-ruled country. Upcoming elections in OPEC member Nigeria are also coming into focus. [ID:nLDE7320FS] STRONG DEMAND GROWTH Oil prices also got a boost from Friday's strong U.S. payrolls data. U.S. employment grew firmly for a second straight month in March and the jobless rate hit a two-year low of 8.8 percent, confirming the labor market was strengthening and fueling optimism about oil demand.[ID:nNOAT00477] The positive data also pushed Asian shares to their highest in nearly 3 years on Monday. [ID:nL3E7F403C] " We have a bigger story on demand side. There is strong demand growth this year, and that is a reflection of the economic prospects of the world," added Vautrain. " On top of that, we have the unusual circumstances of the Japanese power outage which had taken out all the nuclear plants. That will tend to put more load on oil-fired generators going forward." Japan's government on Monday told the operator of the crippled Fukushima nuclear plant to move quickly to stop radiation seeping into the ocean as desperate engineers resorted to bath salts to help trace a leak from one reactor.[ID:nL3E7F402Q] Vautrain noted that while the oil-fired generators in Japan were out too after the March 11 earthquake and tsunami, there were prospects of more being restored over time. " That would probably put up the (crude) price more later." (Editing by Ed Lane) |
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krisluke
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04-Apr-2011 15:39
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M1: Pays S$21.7m for additional wireless spectrum Summary: M1 Ltd has paid S$21.7m to secure a lot of the 1800 MHz spectrum which can be used for 2G, 3G or other technologies. M1 also edged out SingTel and StarHub during the week-long auction but we understand it was done via an open-tender system, suggesting that there was demand for it, given that it is probably the last block in the 1800 MHz band. While the additional spectrum is not expected to bring about cost savings, we believe it will give M1 more flexibility and help to sustain the quality of service, given that network congestion is getting to be a very real issue, no doubt brought on by the continued proliferation of Internet-ready devices. As we are not expecting the additional investment to have any major impact on its financials, we maintain our BUY rating and S$2.79 fair value. (Carey Wong) Karin Technology: Strong performance expected for FY11 Summary: We believe that Karin Technology (Karin) is set to end FY11 strongly, having achieved a good set of results for 1HFY11 recently. In particular, we expect its IT infrastructure division to remain as Karin’s key growth driver. However, potential component supply disruption could result from the recent Japan calamity, as Karin sources a portion of their electronic components from Japanese vendors. Fortunately, Karin still has inventory on hand of about three months and management does not expect any material impact on its FY11 results. We believe that Karin still has potential for growth moving forward, aided by management’s clear focus and strategic initiatives. We bump up our revenue and net profit estimates for FY11 by 15.0% and 8.7% respectively (FY12 by 23.0% and 7.0% respectively). Rolling forward our valuation to 8x blended FY11/FY12F EPS, our fair value estimate is raised from S$0.28 to S$0.315. With a potential upside of 31.3%, coupled with an attractive prospective yield of 7.9%, we maintain BUY on Karin. Key risks include liquidity risk and larger-than-expected component shortages. (Wong Teck Ching Andy) For more information on the above, visit www.ocbcresearch.comfor the detailed report. NEWS HEADLINES - URA's overall private residential price index posted a 2.1% QoQ increase in 1Q11, compared with a QoQ increase of 2.7% in 4Q10, latest government flash estimates show. - US employment recorded a second straight month of solid gains in March and the jobless rate fell to a two-year low of 8.8%. - Singapore’s economy, should it meet the target of expanding 3-5% annually over the next decade, will help generate two jobs for every one local that enters the workforce each year. - Office rents in Singapore continued to trend upwards in the first quarter of 2011 but the pace of growth has moderated in line with the less frantic pace of leasing, according to CBRE. - Contrary to initial expectations, the foreign investment watchdog of Australia could take well beyond 30 days - even as many as 120 days - to make a recommendation on Singapore Exchange's bid for Australian securities exchange operator ASX. - In an update, the manager of Parkway Life REIT said that all its 30 properties in Japan were unaffected by the earthquake and tsunami that hit the nation last month. - STX OSV has received the go-ahead to develop a yard in Pernambuco, Brazil, which signals a previously signed three billion Norwegian kronor (S$683m) contract will soon become effective. - Keppel Corporation said that Jasper Investments has exercised an option with Keppel FELS for a second KFELS B class jackup rig for US$180m, scheduled for delivery in May 2013. - Interest in global investments is expected to climb worldwide over the next decade, according to the Franklin Templeton Global Investor Sentiment Survey 2011. |
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krisluke
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04-Apr-2011 15:37
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Singapore’s STI gained 10.5pts (+0.3%) to 3,105.9. In the broader market, losers led gainers 250 to 214 and 1.3bn shares worth S$1.8bn changed hands. Corporate News... Offshore and Marine. We maintain our previous rig order forecast but increase our estimation for total spending to US$111bn from US$74bn over the next 3 years as we replace some semi-subs with drillships, given the latter’s growing popularity. SMM remains our top pick as we expect more order wins in the near term to boost its share price. Ascendas REIT’s private placement of 206.2m units was closed at S$1.94 last night, 5.3% discount to its VWAP of S$2.05. The price was towards the high end of its pricing range. The book was 2.55x oversubscribed and new units will start trading on 11April. UNDERPEFORM and TP of S$2.09 is under review. AusGroup secured A$60m early works contract for the Karara magnetite project in Western Australia. With this contract award, the Group’s order book stands at AU$262 million. We maintain NEUTRAL and TP S$0.37 as we await more concrete signs of improvement before turning more positive. CapitaLand has entered into a joint venture with Mitsubishi Estate Asia (MEA) to jointly develop a condominium with approximately 600 units at Bishan Central. CapitaLand will hold a 75% equity stake while MEA will hold a 25% stake. Mapletree Logistics announced the acquisition of a warehouse at 15A Tuas Ave 18 for S$24.5m from Jian Huang Engineering. Net property income yield is attractive at 8.2%. MLT intends to fund the acquisition with proceeds from intended divestments which have yet to be disclosed. Maintain OUTPERFORM and TP S$1.05. Serial Systems’s subsidiary Serial Microelectronics is disposing 68% of its equity interest in Unitron for approximately US$1.93 mil. Upon completion of the Agreement, the Group will hold 15% of the equity interest in Unitron, and it will cease to be a subsidiary of the Group. STX OSV has secured a new contract for the design and construction of a Platform Supply Vessel for an undisclosed customer. In addition, its subsidiary Estaleiro Promar SA, has been granted the environmental license for the construction of the new shipyard in Suape, in the state of Pernambuco, Brazil. Pending review, maintain OUTPERFORM and TP of S$1.60. |
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krisluke
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04-Apr-2011 15:35
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Today’s Focus • Keppel Corp – Secured 14th jack-up order within past 6 months. Underlying strong demand for jackups to sustain uptrend in jack up prices. We maintain our view that a pullback for the STI in the immediate term is due. The 200-pt rally in two weeks is a little ‘too fast too furious’ and a pause to consolidate recent gains will be healthy. We also stick to our view that STI’s correction trend since November last year has ended at 2920 on 18 March. The anticipated pullback should find support at 3020- 3045 first, before trending higher to the next resistance band at 3185-3210. While we believe that the stock market’s general direction remains up, albeit at a gradual pace, the usual concerns such as inflation, Europe’s sovereign debt or even a slowdown to China’s GDP growth will re-emerge to check the pace of ascend. Keppel Corp has received a contract worth US$180m from Jasper Investments to build a jack-up rig. Keppel FELS Ltd. will deliver the rig, which is an optional order exercised by Jasper after its first order in December, in the first half of 2013. This is the 14th order received by Kep FELS within the past 6 months for its proprietary design, reflecting the strong market demand for premium jack-ups, and the growing market acceptance for this design. To date, Keppel has maintained its global market share of 78% in securing jack ups, based on orders secured over the past 6 months. YTD new order wins for KEP, including today's order, amounted to S$4.7b, or 2/3 of our assumed contract wins of S$7b for this year. Order book (excluding 1Q11 est. deliveries) is about S$8b, representing a book to bill ratio of 1.45x. We believe the underlying strong demand for jackups will sustain the uptrend in jack up prices, going forward. Maintain Buy on Keppel, TP: S$14.63. Our analyst visited CapitaMalls Asia’s malls in Foshan, Changsha, Wuhan and Shanghai, China. The site visit reaffirms our view that yields within the China portfolio are experiencing gradual uplift in yields. Completed assets are trading at 2-3x their initial returns while gestation period is needed for the new properties. We continue to like CMA for its niche pan Asian retail real estate niche. Maintain Buy call and target price of $2.51. LMA strengthens global direct sales operations with the acquisition of Canadian distributor, Vitaid Ltd. Vitaid is a leading Canadian distributor of premium quality and innovative medical devices for the anaesthesia, emergency and emergency medical services market. Acquisition is in line with Group’s growth strategy of strengthening its distribution network and direct sales presence. The consideration for the acquisition consists of an initial payment of C$1.5m followed by deferred payments in two tranches in June 2012 and June 2013. The initial consideration will be financed by 50% in cash and 50% by the issue of 3.2m shares at a price of S$0.30871 per share. In a sign that the property cooling measures are taking effect, URA’s overall private residential price index posted a 2.1% q-o-q in Q1, compared with a q-o-q increase of 2.7% in Q4 last year. The rate of increase has moderated for six consecutive quarters since Q4 09. Similarly, the HDB’s resale flat price index registered a 1.6% q-on-q gain in the first quarter, the slowest increase in seven quarters. URA's sub-index for prices of non-landed private homes posted a q-o-q gain in Q1 11 of 0.9% for Core Central Region (which includes the prime districts 9, 10 and 11, as well as the financial district and Sentosa Cove), a smaller hike than the 2.2% q-on-q rise for Q4 10. However, the index for Rest of Central Region (which covers places like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong) increased 2.2% q-o-q, a bigger gain than the 1.9% q-on-q gain in Q4 10. The index for Outside Central Region (covering suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok) posted a 3.1% q-o-q rise in the first three months of 2011, after rising 2.1% q-on-q in Q4 10. Although mass market prices continue to see strong price growth, it appears that the last round of policy tightening in Jan 2011 do have some effects. Reasons: 1) HDB market segment, which is the government main concern, has exhibited slower price growth of 1.6% qoq this quarter vs 2.5% qoq last quarter. 2) The slower growth in the prices on CCR could also be a sign that the recent measures have weed out some speculators or short term investors. The Land Transport Authority (LTA) has awarded two civil contracts with a total value of $361.6m for the Downtown Line Stage 3 (DTL3) project. The first, for the construction of Ubi station and its associated tunnels, has been awarded to SK Engineering & Construction from Korea, with a contract sum of $161.7m. The second contract is for the construction and completion of Mattar station and its associated tunnels. It has been awarded to Sato Kogyo for $199.9m. Construction of the two stations and tunnels are scheduled to commence in the second quarter of this year and targeted to complete in 2017. |
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krisluke
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04-Apr-2011 15:27
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Jasper: Jasper will have a fleet of 4 rigs upon completion after exercising its option for another jackup rig from KepCorp. To finance the acq, co intends to issue 122.1m new shares at $0.096 per share (a 37% premium to last traded) to Hygrove Invt for a total of $11.7m. .. Recently, Jasper has obtained a US$194m loan from controlling sh/h Morton Bay and placed new shares to Hygrove for US$8.9m on 16 Mar 2011. Co has a 98.1% owned subsidiary Jasper Offshore which holds its rigs and offshore marine businesses but as of 3Q results in Dec, still posted a loss of US$6.5m. KepCorp: Jasper has exercised an option for KepCorp to build another jackup rig for US$180m due in 1H2013. Similar to the prev rig, this rig will be able to operate in depths of 400 feet, drill 30k ft deep and accommodate 150 men. Its first order for 2Q after a record 1Q, KepCorp’s order book now stands at est $4.6b with options for 14 rigs worth another $3.8b… Of interest, KepCorp’s associated co Dyna-Mac may possibly profit from the flow of orders that KepCorp has obtained. Dyna-Mac closed at $0.56, a 60% gain from IPO price of $0.35. |
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krisluke
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04-Apr-2011 15:22
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? continue to monitor other news lah. Jasper contract, benefit dyna mac...
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rotijai
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04-Apr-2011 15:02
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master krisluke, dyna-mac is so scary @_@ o & m has gone up so much in the recent weeks.. though there's still upside, most counters have gone into the overbought zone.. wat do u think? |
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krisluke
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04-Apr-2011 14:58
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Nuclear Vs Renewable Energy Analysis: Nuclear crisis highlights prospects for renewable energy Players are betting on the change in how electrical power is generated in the immediate future driving the Global benchmark indexes to their highest in 14 months. The Global FTSE Cleantech Index has risen more than 8% since Japan’s earthquake struck on March 11,beating a rise of around 2% in the MSCI all-country World stock index. The WilderHill New Energy Global Innovation index of alternative energy stocks has gained around 12%. “If nuclear contributes less, then something has to make up the difference and that could very easily be renewables,” Paul Hanrahan, President and CEO of New-York listed global power firm AES Corporation said in Singapore recentlly. China, the World’s largest energy consumer, has announced plans to raise the price of power generated from renewable sources over the next 2 yrs to help encourage investments. China’s renewable energy law obliges grid firms to buy all the renewable electricity produced in their region, even though it is more expensive than coal-fired power, but it also allows them to charge “additional” fees for clean electricity sources. Besides trying to double solar power capacity, renewable energy officials have urged more government support, saying promotion of clean energy sources could help fill any likely supply gap if safety concerns were to slow China’s nuclear program. “Nuclear power can probably improve China’s energy security, but whether it improves overall national security is something that needs to be thought about deeply,” Li Hejun, Chairman of the China New Energy Chamber of Commerce, which lobbies on behalf of the renewable sector. After the Japanese nuclear disaster, German Chancellor Angela Merkel declared a 3-month moratorium on an extension her government had given last year to 17 nuclear reactors, carrying their life span an average of 12 yrs beyond a prior Y 2022 cut-off date. Taiwan’s state-run Taipower said it was studying plans to cut nuclear power output. “Whatever their exact outcome, the Fukushima events are likely to shift the energy policy balance toward renewables,” Pricewaterhouse Coopers said in a report on March 28. Swiss Energy Minister Doris Leuthard suspended the approvals process for three nuclear power stations so safety standards can be revisited after the crisis in Japan. Robin Batchelor, a fund manager at BlackRock (NYSE:BLK) responsible for US$8.2B in energy-related funds, said renewables were not really in focus for fund managers prior to the crisis in Japan, adding that the disaster may prompt countries to have a rethink on them. |
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krisluke
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04-Apr-2011 14:56
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Report on Gold, Silver and Crude Oil Red’s Weekly Report on Gold, Silver and Crude Oil 3 April 2011 Paul A. Ebeling, Jnr. www.livetradingnews.com The Overall Fundamentals Last week players paid more attention on macro-economic data after focusing on the chaos in the MENA region, and the crisis in Japan prior. Upbeat economic data boosted the sentiment, resulting in rises in both equities and commodities. In the USA, personal spending rose +0.7% M-M in February, the best result since October 2010, and January’s reading was revised up to +0.3%. Personal income rose +0.3% on monthly basis. The savings rate dipped to 5.8% in February from 6.1% in the month prior. The core PCE deflation gained +0.2% M-M in February, lifting the annual inflation rate to +0.9%. Rising inflation momentum has raised expectations of US Fed’s tightening this year from some Hawks. The job market has shown encouraging improvement. Non-farm payrolls added +216K in March, higher than consensus of +190K and an upwardly revised +194K in the prior month. Stronger employment growth sent the jobless rate lower to a 2-year low of 8.8% from 8.9% in February. The Manufacturing sector: the ISM manufacturing index slid less than expected, by -0.2 pts, to 61.2 in March. The PMI in the EuroZone fell to 57.7, below initial estimate of 57.7, in March from 59 a month ago while the reading in China accelerated for the 1st time in 4 months to 53.4 in March from 52.2 in February. Strength in China’s manufacturing activities signaled the government’s efforts to sustaining growth and curb inflation. Inflationary pressures have not only been seen in emerging markets but also in advanced economies. Preliminary HICP in the EuroZone rose to +2.6% Y-Y in March from +2.4% a month ago. The market is awaiting the ECB meeting this week as the central bank will very likely announce a rate hike of +25 bps. Major central banks that will meeting in the coming week include the RBA, the BOJ and the BOE. Stay tuned…. The Precious Metals The Gold price dipped after release of better-than-expected US employment data as the rising growth momentum boosted speculations of the US Fed’s tightening. But, the price later rebound later in the day Friday helped by central bank purchases. While sovereign crisis, geo-political tensions in the MENA region and uncertainties in Japan continue to cause volatility in Gold, the precious Yellow metal will be very much influenced by change in monetary policy IMO. The upcoming event will be ECB’s rate hike Thursday. President Trichet’s comments at the press conference after the announcement will surely move prices. While the next FOMC meeting will not be held until April 24, speeches from Fed members will be closely watched too. Recent comments from the regional Fed Presidents have turned more Hawkish. Philly Fed President Charles Plosser said ’signs that inflation expectations are beginning to rise or that growth rates are accelerating significantly would suggest that it is time to begin taking our foot off the accelerator and start heading for the exit ramp’. He also added ‘it’s certainly a possibility’ for the US Fed to raise interest rates before the end of the year. The issue is ‘definitely on the table but it will depend on how things play out over the next few months’. Separately, Dallas Fed President Richard W. Fisher said it ‘makes a lot more sense’ to stem stimulus measures as unemployment fell and the US’ growth is ’self-sustaining’. These comments will exert downward pressure on Gold if they continue. That said, I expect Gold to be supported by Strong physical demand as the price corrects. The People’s Bank of China (PBOC) recommended in the annual Financial Markets Report to buy Gold as a hedge against inflation, and as value preservation in a World where major currency (USD) is declining in value against the precious Yellow metal. In the medium to long-term, my outlook for Gold is Bullish with price hitting new highs. The Base Metals The complex was mixed last week as investors concerned about Chinese demand. Copper fell more than -3% on the week, recording the 1st weekly loss in 3 on worries that tightening in China will dampen the demand outlook. Aluminum, Tin and Nickel also fell, and Lead and Zinc closed modestly higher during the week. I believe the complex with continue to move without direction until players become confident on the fundamentals again. Crude Oil Crude Oil prices moved steadily North in the week before resuming recent rallies as prolonged chaos in Libya signaled that disruptions in Crude Oil supplies will be longer than anticipated. The front-month contract for WTI Crude Oil prices rose to a new 30 month high of 108.46 before finishing the week at 107.94, +2.41% while the equivalent Brent Crude contract rose as high as 119.14, the highest level in more than 2 yrs, before finishing at 118.7, +2.69%. The spread between WTI and Brent Crude prices remained above 10 bbl. The unrest in the MENA region has raised worries about a tighter supply outlook. On the demand side, consumption in emerging markets such as India and China has been Strong while that in advanced economies such as the US and Japan also showed encouraging developments. The nuclear crisis in Japan has triggered Global policymakers to rethink the use of nuclear power. Delays in construction of nuclear plants or cancellation of related projects suggest higher reliance on rude Oil, Nat Gas and Coal are energy sourced. India’s domestic Crude Oil product sales climbed +3.5% Y-Y to 11.66M tons in February. Despite a dip from the +6% gain in prior month, growth will pick up again soon as demand for petrol and diesel will rise in April when diesel-fueled vehicles will be used for election campaigning. The Country’s demand is expected to increase by +4.7% to 144.35M BPD this year. In China, apparent Crude Oil demand climbed +10.1% Y-Y to 36.65M tons in February. For the full Y 2011, the Country’s demand may grow 5-7%. While it will be a slowdown from a +12% increase in Y 2010, China will continue to lead the World’s Crude Oil demand growth. Recent reports also show that demand from advanced economies such as Japan and the US also rose modestly in January. At the speech ‘Blueprint for a Secure Energy Future’, US President Obama indicated ‘it is absolutely certain that demand will go up a lot faster than supply’ and Crude Oil prices will stay higher for a long time to come. Saudi Arabia, the World’s largest Crude Oil producer, is the primary source of balancing demand and supply as it possesses 80% of global spare capacity. The recent news that ARAMCO, the state-owned oil company, called on Top oilfield service companies to help boost the country’s oil rig count by 28% over the course of this year, and next surprised the market. People familiar with the matter said that ARAMCO wants to see the Saudi oil rig count rise to 118 from a current level around 92. Plus it wants to speed up to 0.9M BPD Manifa project. These plans have raised market worries that the Kingdom may not be able to keep up with its original production profile. I do not have thoses concerns but believe the move is necessary as World Crude Oil demand is and has been on the rise with spare capacity falling. Nat Gas Nat Gas price got stuck between Bearish inventory data, rising temperatures and ongoing uncertainty in Japan. The benchmark Nymex contract initially extended gains early in the week, but reversed and ended with a -0.93% dip Friday. According to the DOE/EIA, Nat Gas storage climbed +12 bcf to 1624 bcf in the week ended March 25, the 1st increase in NatGas inventory since the week of November 12, 2010. Stocks were -12 bcf less than the same period last year and +68 bcf, or +4.4%, above the 5-yr average of 1556 bcf. Shipments to US and Canadian household fell last week as weather was warmer than normal. Separately, Baker Hughes reported Gas rig counts rose for a 2nd week, by +11 to 891 units in the week ended April 1. |
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krisluke
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03-Apr-2011 19:35
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China’s President to Chair BRICS Summit China’s President to Chair BRICS Summit, and address the Boao Forum Chinese President Hu Jintao will chair the BRICS Leaders’ Meeting and address the Boao Forum for Asia, both slated for mid-April in the southern island province of Hainan, Foreign Ministry spokeswoman Jiang Yu announced Thursday. China will host the BRICS summit on April 14 in Sanya city of Hainan,to be attended by Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma, Jiang said. BRICS is a group acronym that refers to Brazil, Russia, India, China and South Africa, which are considered to be at the same stage of economic development. The BRICS leaders will have in-depth exchanges of views on the international situation, economic, financial and development issues and outline their future cooperation, Jiang said. Hu will also attend the opening ceremony and deliver a key-note speech for the annual conference of the Boao Forum for Asia on April 15 in Boao, Hainan, the spokeswoman said. Russian President Dmitry Medvedev, Brazilian President Dilma Rousseff, South African President Jacob Zuma, ROK Prime Minister Kim Hwang-sik,Spanish Prime Minister Jose Luis Rodriguez Zapatero, Ukrainian Prime Minister Mikola Azarov and New Zealand Deputy Prime Minister and Minister of Finance Bill English have been invited to the opening ceremony of the Boao Forum, she said. |
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krisluke
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03-Apr-2011 19:23
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Crude Oil climbs to past 108Crude Oil climbs to past 108 on Libya chaos Crude Oil price Friday climbed and finished 108.12 bbl as Libyan leader Muammar Gaddafi’s troops forced rebels to pull back from Oil towns in eastern Libya. Gaddafi’s forces took back oil ports at Ras Lanuf and Brega, and rebels prepared for a counter-attack in oil-rich eastern areas on Thursday. Battles between the two sides have seesawed back and forth in Libyan ports and towns since the unrest broke out in mid- February. Libya’s Oil exports of 1.8M BPD, accounting for 2% of World Crude supply, are shut down. The rebels have issued a timetable to restore the exports after they seized the control of Oil fields and ports. But the hope was dashed again. Meanwhile, the on-going unrest in Syria, Yemen and Bahrain also pressured the markets and pushed the Crude Oil price higher. Light, sweet Crude for May delivery surged 108.12 bbl on the New York Merc, its highest close since September 2008. In London, Brent Crude for May delivery also traded higher and finished at 118.86 bbl. Paul A. Ebeling, Jnr. |
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krisluke
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03-Apr-2011 19:21
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Inflation Control in China
In View: China says No to consumer products price increases Unilever, the Anglo-Dutch consumer goods group (NYSE:UL) said yes to Beijing to delay planned price increases, highlighting a regulatory risk in an inflationary climate. Chinese authorities routinely force state-owned enterprises to place the public interest ahead of commercial concerns, now Unilever has confirmation of the government’s request signals that large foreign multinationals are not immune to the regulations. A Unilever spokeswoman in London said: “I can confirm that Unilever China received a request from the National Development and Reform Commission and has chosen to comply with it, and postpone price adjustments previously scheduled for April 1.” Chinese consumers, increasingly alarmed at the rising cost of living, cleared supermarket shelves this week of shampoos, soaps and detergents after state media said four consumer goods companies, including Unilever and Guangzhou Liby Enterprise Group, would raise prices by between 5 and 15%. Alarmed by the reaction, Beijing is understood to have contacted companies to urge price restraint. China’s consumer price index rose 4.9% Y-Y in February. “When you wake up and see photos of old people rushing into Supermarkets in a panic, that is a signal to government that this is a serious problem,” said Shaun Rein of China Market Research in Shanghai. Alongside Unilever, Liby, another leading detergent producer,and Tingyi, which produces 50% of China’s instant noodles, agreed to delay planned price rises. Tingyi said it acted “in alignment with the policy of the State for maintaining the stability of commodity prices”. Wei Ing-chou, Chairman and CEO, had spoken of the need to “watch which way the political wind blows”, when announcing the rise but, explaining the delay Friday, the company pointed to signs that raw material prices were stabilizing. Luo Zhiping, analyst with Business Information Research, a Shanghai-based consulting firm with close ties to government, said the goal was to “prevent consumer chaos” after widespread panic-buying of salt, which was viewed as an antidote to potential radiation from Japan’s earthquake-crippled nuclear power station . By firing this “Shot Across the Bows” of companies whose planned price increases were widely publicized, Beijing should be able to convince a wide range of companies to contain most prices, at least temporarily, he said. Unilever would not say how long it would postpone the price rise. Liby said that after being contacted, it had decided “to take the whole situation of the market and consumer reaction into account” and delay or even rescind price increases that had already been put in place. |
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krisluke
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03-Apr-2011 19:20
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US manufacturing sector updateThe US manufacturing sector marked its 20th straight monthly growth in March The manufacturing sector in the United States in March grew for the 20th month running, and the overall economy grew for the 22nd consecutive month, reported a leading industry survey Friday. The US Institute of Supply Management (ISM) manufacturing index, also known as the purchasing managers index (PMI), recorded at 61.2% in March, down from the revised 61.4% in February, a reading above 50% indicates an expanding manufacturing sector. “The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60% for the 3rd consecutive month,” said Norbert Ore, Chief of the ISM, “The component indexes of the PMI remain at very positive levels and signal strong sector performance in Q-1.” According to the latest government data, the US economy grew at 3.1% in Q-4 Y 2010. For all of Y 2010, the economy grew 2.9%, the most since Y 2005. It was an improvement from Y 2009 when the economy suffered its worst decline in more than 60 yrs. Many economists expect that the US economy may grow nearly 4% in Y 2011. Paul A. Ebeling, Jnr. |
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