CPO futures at 6-week high, gold rallies, USD weakens

KUALA LUMPUR: Crude palm oil futures for third-month delivery rallied to RM2,712, the highest since Aug 9 while price of US spot gold rallied.

At 1.30pm, CPO was up RM85 to RM2,712 per tonne, the highest since Aug 9.

Gold rose US$7.27 to US$1,281.55 per troy ounce.

The US dollar index weakened to 81.271 against a basket of six major currencies from 81.398 last Friday.

The US dollar index indicates the general international value of the dollar. The index averages the exchange rate between the greenback and six major world currencies.

Goodway Integrated says no development in MoU with India's Indag

KUALA LUMPUR: GOODWAY INTEGRATED INDUSTRIES [] Bhd said there has been no material development following the signing of the MoU with India's with Indag Rubber Ltd.

The MoU signed on Aug 23 was to consider joint opportunities which are expected to strengthen both parties' market position in the rubber compounding and retreading industry.

The company said on Monday, Sept 20 'that as at to date, there is no material development in regard to the aforesaid MoU'.

CPO rallies, but investors cautious on equities

KUALA LUMPUR: The FBM KLCI managed to stay in positive territory by midday on Monday, Sept 20 but slipped below the 1,470 level as some mild profit taking emerged, in line with some regional markets.

Uncertainty about global economic recovery, fuelled by weak U.S. consumer sentiment data on Friday and a public holiday in Japan also kept many investors sidelined at the regional markets, according to Reuters.

However, there was some interest in commodities, including palm oil which propped up the 30-stock FBM KLCI. The FBM KLCI rose 1.89 points or 0.13% to 1,468.68, aided by gains including at Sime Darby, CIMB, Genting and Tenaga. Losers led gainers by 366 to 267, while 249 counters traded unchanged. Volume was 465.13 million shares valued at RM588.55 million.

Hang Seng Index -0.06% 21,957.69 Shanghai Composite Index -0.04% 2,597.54 Kospi Index -0.27% 1,822.40 Singapore's Straits Times Index -0.07% 3,078.56 Taiwan's Taiex +0.41% 8,191.93 Crude palm oil for the third month delivery jumped RM84 per tonne to RM2,711; crude oil added 27 cents per barrel to US$73.93 while gold gained US$7 per ounce to US$1,281.30.

Among the major gainers this morning, Sime Darby rose 14 sen to RM8.29, Genting up 10 sen to RM10.10 while CIMB, Tenaga and UMW added seven sen each to RM8.34, RM9.08 and RM6.57, respectively.

Other gainers were Dutch Lady that rose 68 sen to RM16.04, HELP up 24 sen to RM4.78, Kulim up 23 sen to RM8.45, Sunrise up 20 sen to RM2.26, Bintulu Port 19 sen to RM6.99 while IJM and United Malacca rose 12 sen each to RM5.12 and RM11.58.

Nestle fell 72 sen to RM41.72; BAT lost 60 sen to RM47, Panasonic down 38 sen to RM20.10, PPB fell 34 sen to RM17.56, DiGi down 30 sen to RM24.40, F&N down 20 sen to RM14.70 and Hong Leong Financial Group down 15 sen to RM9.12.

Glovemakers were also among the decliners, with losses at Top Glove, Supermax, Adventa, Kossan, Hartalega and Rubberex.
KNM was the most actively traded counter with 40.2 million shares done. The stock added half a sen to 44.5 sen. Other actives included Tejari, Sanichi, Asia EP, Dataprep and Gamuda.

Dollar, commodities steady, markets await Fed

SINGAPORE: The dollar was on the defensive and gold held near a record high on Monday, Sept 20 as possible further Federal Reserve moves to increase money supply weighed on the U.S. currency and boosted alternative assets.

Uncertainty about the global economic recovery, fuelled by weak U.S. consumer sentiment data on Friday, and a public holiday in Japan also kept many investors sidelined, with oil steady after a drop last week and Asian equities treading water.

Japan intervened to sell yen for the first time in six years last week, partially interrupting a decline in the dollar that began when talk of further quantitative easing -- effectively printing money -- by the U.S. central bank revived last month.

"If the Fed decides to give more hints it is about to embark on more QE, the U.S. dollar slide will probably continue," said John Kyriakopoulos, a currency analyst at National Australia Bank in Sydney.

The Fed is not expected to make any new monetary policy moves on Tuesday, but the post-meeting statement will be closely parsed for signals on the debate about whether further large-scale asset purchases are needed to support the sluggish recovery.

Views differ among Fed officials about whether stubbornly high unemployment merits more aggressive policy intervention.

Recent data appear to indicate the U.S. economy is not sliding back into recession as some market watchers had feared, but investors are wrestling with how to value stocks as the global recovery loses momentum and sales outlooks grow more unclear.

MSCI's broadest index of Asian shares outside Japan was flat , with equity markets gaining modestly in Singapore and Taiwan but losing ground in Hong Kong, South Korea and Australia

BETS AGAINST DOLLAR

Market sentiment on the major currencies was summed up by the latest Commodity Futures Trading Commission data. They showed investors had increased bets against the U.S. dollar to the highest level in a month, while sharply cutting back net short positions in the euro and sterling.

On Monday, the dollar was parked at 85.70 yen having spent Friday in a tight 85.57 to 85.92 range as the risk of further intervention by TOkyo kept investors away.

Gold which tends to benefit from economic uncertainty as it is viewed by many investors as a safe-haven asset, traded around $1,279 an ounce, not far from the all-time peak of $1,282.75 struck on Friday.

U.S. crude oil futures which slipped nearly 4 percent last week, gained 34 cents to $74 a barrel, with many traders waiting for the Fed's readout on the U.S. economy.

"If they lower their forecasts as some people are expecting, oil prices would be pushed down because it implies lower demand," said Michelle Kwek, an analyst at Informa Global Markets in Singapore. - Reuters

Apple's latest iPhone to go on sale in China on Saturday

SHANGHAI: China Unicom said it will launch Apple's latest iPhone in China on Saturday, Sept 25, as it attempts to claw back market share with a rollout of the US company's popular smartphones.

The iPhone 4 will be sold through China Unicom on two-year phone contracts and also through Apple retail stores in China, the world's largest mobile phone market with more than 790 million subscribers.

China Unicom, the sole telecom distributor of Apple's iPhone in the country, had seen slow sales for the handset because of high subscription fees and stiff competition from lower priced Android handsets.

Apple opened its second flagship store in China in July and is on track to have 25 retail outlets in the country by the end of next year. Apple executives said in April that they saw the Chinese market as a major growth opportunity. ' Reuters

Nissan says plans to nearly double China capacity by 2012

ZHENGZHOU (China): Japan's Nissan Motor Co Ltd will boost production capacity in China to 1.2 million units by 2012, nearly double its current capacity, chairman Carlos Ghosn said on Monday, Sept 20.

The company would add three plants in China, Ghosn told reporters at the opening ceremony of the company's new plant in Zhengzhou, central China.

The move underscored the strong interest from foreign automakers in the world's biggest car market. ' Reuters

BNM buys renminbi-denominated bonds, says FT

KUALA LUMPUR: Bank Negara Malaysia bought renminbi-denominated bonds for its reserves, marking a significant advance for Beijing's attempts to internationalise the use of its currency, according to the Financial Times.

The newspaper said in on Sunday, Sept 19 the central bank's move is also expected to herald further diversification into Chinese government securities by other Asian countries.

Chinese Chinese policymakers has been pitching the renminbi as a long-term rival to the US dollar.

'This brings the renminbi's credibility to a whole new level,' Dariusz Kowalczyk, a Hong Kong-based strategist at Cr''dit Agricole, was quoted saying by FT.

Maybank Research initiates coverage of CapitaMalls Malaysia Trust

KUALA LUMPUR: Maybank Investment Bank Research has initiated coverage of CapitaMalls Malaysia Trust (CMMT) with a buy and target price of RM1.20 a share.

The research house said on Monday, Sept 20 that CMMT's Gurney Plaza, Sungei Wang Plaza strata parcels and The Mines have prospered with Malaysia.

'These substantially fully-tenanted PROPERTIES [] have navigated increasing competition and changing consumer trends and flourished. We see this continuing under the management of CMMT. Our RM1.20/sh DDM-based TP translates into a 6.5% implied yield,' it said.

FBM KLCI extends gains at mid-morning

KUALA LUMPUR: The FBM KLCI stayed in positive territory at mid-morning on Monday, Sept 20, lifted by gains including at Sime Darby, Tenaga, CIMB and Genting.

At 10am, the benchmark index was up 0.29% or 4.27 points to 1,471.24. Gainers led losers by 211 to 193, while 205 counters traded unchanged. Volume was 193.1 million shares valued at RM180.59 million.

Among the major gainers, Sime Darby rose 10 sen to RM8.25, Tenaga up nine sen to RM9.10, CIMB and Genting added six sen each to RM8.33 and RM10.06 respectively, PLUS up five sen to RM4.28 while BAT rose 30 sen to RM47.90.

Aeon was up 25 sen to RM5.90, HELP gained 17 sen to RM4.71, DFZ Capital rose 15 sen to RM3.80, Dutch Lady added 14 sen to RM15.50 and Kulim up 13 sen to RM8.35.

Sunrise gained 12 sen to RM2.18, while Naim and IJM rose 11 sen each to RM3.65 and RM5.11 respectively.

Nestle was the top loser, falling 98 sen to RM41.46. Sarawak Oil Palms fell 23 sen to RM2.56, United Malacca down 20 sen to RM11.26, Tan Chong lost 13 sen to RM5.87, Supermax and Bonia fell 11 sen each to RM4.47 and RM1.66 respectively, Public Bank down eight sen to RM12.68, Lay Hong fell seven sen to RM1.98 while Maybulk lost six sen to RM2.95.

KNM was the most actively traded counter with 27.12 million shares done. The stock added 1.5 sen to 45.5 sen. Other actives included Asia EP, Tejari, Sanichi and Dataprep.

Regional markets were mixed Monday morning, with Taiwan's Taiex up 0.29% to 8,182.16 and Singapore's Straits Times Index up 0.15% to 3,080.89, while the South Korean Kospi fell 0.25% to 1,822.74, Shanghai's Composite Index down 0.07% to 2,596.79 and Hong Kong's Hang Seng Index opened 0.2% lower at 21,918.45.

Japan's stock exchange is closed for a national holiday.

Hwang DBS Vickers Research: No reason for Perodua, Proton merger

KUALA LUMPUR: Hwang DBS Vickers Research said that two months after calling for a consolidation of the auto industry, Proton is now not interested in a merger.

The research house said on Monday, Sept 20 it was relieved that Proton is no longer pushing for a merger with Perodua, which it called an industry consolidation.

Its adviser Tun Dr Mahathir Mohamad was quoted saying on Friday, Sept 16 that financially, Proton is quite okay now. Instead, Proton would opt to form a "simple cooperation" with other companies once it completes its ongoing restructuring process.

'In our earlier comment (July 2010), we said that there is no reason for Perodua to merge with Proton because their platforms are different, which can result in an operational mess, and hence, operational synergies that Proton is arguing for may be hard to realise.

'Also, Proton is the one who has utilisation inefficiencies, not Perodua, making a merger of the two a one-sided deal in favour of Proton,' said the research house.

Hwang DBS Vickers Research said it agreed with Dr Mahathir that Proton is financially stable and it holds the view that it had turned the corner, with projected 3-year CAGR (CY10F-CY12F) of 40% on the back of good sales, better economies of scale and improving efficiencies.

'Hence, we retain our Buy call on Proton with a TP of RM6.60 (0.7x CY11F NTA). We also have Buy ratings on MBM Resources with a TP of RM4.80 (6x FY11F PE) and UMW with a TP of RM7.40 (sum-of-parts),' it said.