BURSA MALAYSIA >>> Property Tax Revision Boosted FBM KLCI +3.41 pts 24 Dec 2009

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Property Stocks Boost FBM KLCI

The benchmark FTSE Bursa Malaysia (FBM) Kuala Lumpur Composite Index reversed the morning's easier trend to finish 3.41 points higher at 1,263.94. It opened 0.52 of a point lower at 1,260.0 Thursday morning.

Prime Minister Datuk Seri Najib Tun Razak announced on Wednesday that the tax will only be applicable on properties that are sold within five years of their purchase.

The revision of the real property gains tax policy bolstered renewed confidence in property counters and was described as the "perfect Christmas gift" for the sector.
" It provides a much needed relief to the sector as it sends an affirmative signal that the government will adopt an accomodative stance to support the property sector," said ECM Libra Investment Research in its research note Thursday.

The FBM Emas Index added 27.95 points to 8,421.43, the FBM Top 100 Index increased 25.48 points to 8,339.03, the FBM 70 Index advanced 38.15 points to 8,151.53 but the FBM Ace Index eased 17.99 points to 4,200.53.
The Finance Index rose 25.44 points to 10,905.94 prompted by Maybank which rose three sen to RM6.80 and CIMB Group which gained two sen to RM12.84.

The ACE Market volume slipped to 28.224 million shares, worth RM7.567 million, from 35.952 million shares worth RM9.441 million previously.

Gainers led losers 340 to 208 while 268 other stocks remained unchanged.Dealers said trading was moderate ahead of the long weekend amid positive sentiment bouyed by advances in regional markets.
The local bourse will be closed tomorrow for Christmas.

BT Team members wishes all visitors

Merry Christmas & Happy New Year!!!

Palm Oil Remains “Jewel” In Highly Volatile Commodities Sector

Malaysia’s commodity sector remained crucial in 2009 as it provided the much needed boost at a time when the nation is facing an economic stalemate.

Through its main stay – palm oil, remained the “jewel” in the commodity sector and the country reaped the benefits of high prices, improved productivity and strong export demand which led to higher export earnings.

In 2009, crude palm oil fetched the highest price of 2,894 per tonne on May 13, bringing a windfall to the 2.2 million smallholders who depend on the commodity for a livelihood.

But as of December, prices hovered between RM2,400 and RM2,600 per tonne as there was mounting concern that stocks were building up. Analysts predict that the hotter weather due to the El-Nino pattern and stronger demand from China and India, would push the price to breach the RM3,000 per tonne level next year.
Infact, the “golden crop” is poised for even better days as the country has taken steps to internationalise the crude palm oil futures (CPO) contract which is traded on Bursa Malaysia Derivatives.

A senior palm oil trader with Interband Group Sdn Bhd, Jim Teh, told Bernama that there was a possibility the cpo market could enter into a bull run in the second half of next year.

“There is likely be more foreign players emerging in the trading of cpo futures market here next year,” Teh told Bernama, attributing his optimism to the collaboration between Bursa Malaysia Derivatives and CME Group Inc, the world’s largest and most diverse derivatives marketplace.

Under the first agreement signed with CME, crude palm oil futures will be traded on Globex CME which has access in over 80 countries.

The second agreement allows for CME to develop a US dollar denominated CPO futures contract to be listed on Globex CME.

The main justification for this move is to ensure price discovery for palm oil remained in Malaysia, the second largest oil palm producer after Indonesia, and to obtain a fair price for palm oil among international edible oils.

Meanwhile, concerns over the pace of the global economic recovery too generally had some impact on commodities market with banks limiting the amount of credit extended to business to exercise prudence.

However, Teh said most oil palm producers could still be “laughing their way to the bank” with decent profits as cost of production was still low RM1,500 per tonne.

The MIDF Malaysia Equity Research Report said CPO had outperformed its closest rival, soyoil, as buyers of edible oils switched to the golden oil which is sold at a discount.

The spread between soyoil and palm oil continued to widen making the former more expensive for consumers.

As a result, palm oil is today consumed worldwide, is the vegetable oil with the highest level of penetration and many countries like India and China depend heavily on it.

TECHNICAL ANALYSIS >>> 综合指数 2009年 12月 23日 / Composite Index 23/12/2009

综合指数 2009年 12月 23日
富时综合指数微扬0.11点，惟再度在布林中频带（Bollinger Middle Band）遇阻（参考箭头A），这意味着布林中频带继续的成为综指接下来的主要阻力水平，综指的支持水平则维持在1257点的费氏线。

如图所示，布林频带（Bollinger Bands）收窄1%，这显示综指仍然维持一个横摆巩固的格局。通常综指将持续盘整，直到布林频带再度打开为止，届时综指处于布林中频带的相应位置将是综指的新趋势的方向。

如图中箭头B所示，马股成交量进一步下退，目前成交量只达到40天成交量移动平均线（VMA）的水平的一半，这表示市场整体上处于一个淡静的格局，所以综指的波动率也相应的减低，呈横摆的格局。

如图中C圈所示，随机指标（Stochastic）精确的在30%的水平遇阻，这显示综指的短期走势仍然维持在一个偏弱的格局。以技术而言，综指将继续维持趋软的走势，直到随机指标能成功上扬突破30%的水平为止。

布林频带仍然维持收窄的格局，这表示综指目前正酝酿着一个新的趋势，通常此新趋势将在布林频带开始明显的打开时才出现，届时综指的新趋势将由综指处于布林中频带的位置为止来决定：若综指处于布林中频带以上的话，那综指将有望再度上扬，反之若综指处于布林中频带以下，综指将有形成跌势的风险。

Composite Index 23/12/2009
The KLCI ended marginally higher on Wednesday, while still resisted by the Bollinger Middle Band, as indicated by A. This suggests that the Bollinger Middle Band is still serving as the dynamic resistance for the KLCI, while the support is still at 1257 Fibonacci Retracement.

As shown on chart above, the Bollinger Bands contracted 1%, suggesting that the KLCI is still trading in a consolidation mood, and the consolidation shall carry on until the re-expansion of the Bollinger Bands. Then, the relative position of the KLCI above or below the Bollinger Middle Band shall determine the new movement for the KLCI when the Bollinger Bands expands.

As indicated by B, total market volume continues to fall, with volume only reaching half of the 40-day VMA level. This suggests that the overall market is indeed really quiet, as market sentiment is still weak.

As circled at C, the Stochastic stopped climbing at 30% level, failing to break above the short term bearish region. Therefore, this suggests that the short term movement of the KLCI is still weak. Technically speaking, the Stochastic has to break above the 30% level, to signal a beginning of a technical rebound for the KLCI.

With the Bollinger Bands still contracting, the KLCI consolidation continues while also preparing for a new movement. Therefore, we shall have to wait for the re-expansion of the Bollinger Bands to signal the beginning of a new movement. In short, in order to regain some strength, the KLCI has to first break above the Bollinger Middle Band, or else, the immediate outlook for the KLCI is still on the negative side.

What Is U.S. Dollar Index?

U.S. Dollar Index: This index is a basket of six major currencies weighted against the greenback and rolled into one composite price index. It's an excellent barometer of the overall health of the U.S. currency compared to the other major currencies of the world.

Note the weekly continuation chart for nearby U.S. dollar-index futures. Recent price action has pushed above and negated a solid downtrend line that had been in place for nine months.

Note, as well, at the bottom of the weekly chart for the U.S. dollar index that the Moving Average Convergence Divergence (MACD) indicator has recently produced a bullish line crossover signal, whereby the thick blue MACD line crossed above the thin red "trigger" line of the indicator. This is the first bullish MACD signal given on the weekly chart since May of 2008. In July of 2008, the dollar index began a major rally.

Remember that it's important for traders to keep a close eye on the key "outside markets" that have been impacting so many other markets recently.

Those markets are the U.S. dollar index, crude oil, gold and the U.S. stock indexes.

BURSA MALAYSIA Overview >>> FKLI and FCPO 22 Dec 2009

FKLI contracts ended mixed; All months turned discounts to underlying cash
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures on Bursa Malaysia Derivatives ended mixed & turned discount Tuesday despite a higher cash market, said dealers.

The December contract closed 1.0 point lower at 1,258.0 points, reversing its 3.34 points premium Monday to 2.42 points discount. The contract however opened 1.5 points firmer at 1,260.5 points and traded between 1,256.0 and 1,261.0 points during the day.

The January 2010 contract eased 0.5 of a point to 1,258.5 points, which is a discount of 1.92 points to the cash market against a premium of 3.34 points a day earlier. It traded between 1,256.5 and 1,261.0 points during the day.

The March 2010 contract rose 1.0 point to 1,258.0 points, which is a discount of 2.42points, while the June 2010 contract closed 1.0 point higher at 1,258.5 points, representing a discount of 1.92 points to the underlying.

Total volume declined to 2,585 lots from 2,740 lots on Monday while open interest rose to 17,801 contracts from 17,061 contracts.

The underlying FBM KLCI ended the day at 1,260.42, up 4.76 points after opening 3.23 points higher at 1,258.89 Tuesday morning.

Crude Palm Oil Ends Down On Profit-Taking, Stronger Dollar
Crude palm oil futures on Malaysia's derivatives exchange fell for the second day Tuesday on continued profit taking triggered by weakness in Chinese commodities and a stronger dollar.

The benchmark March contract on the Bursa Malaysia Derivatives ended MYR40 or 1.6% lower at MYR2,515 a metric ton, after trading in a range of MYR2,514-MYR2,550/ton.

Trade expectation that the Chinese government may release 200,000 tons of soyoil and 300,000 tons of rapeseed oil from its reserves toward the end of this year has dampened sentiment on the Dalian Commodity Exchange, leading to spillover weakness on the BMD, traders said.

"Investors will be monitoring China's decision on whether it will release its reserves," said a Malaysia-based exporter.

"The palm oil market went up too high last week. Some correction and liquidation is expected at intervals until the end of the year," said a Singapore-based trading executive.

He said despite some profit taking, a sharp fall in prices seems unlikely because of strong industrial demand for palm oil from China, the world's major buyer of vegetable oils.

"Despite higher CPO prices, demand from China has remained fairly robust, as Chinese buyers are stocking up for the Chinese New Year in February," he added.

While cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. estimated a decline in Malaysia's palm oil exports during the Dec. 1-20 period by around 7%, exports to China have risen by 7%-13% on month.

Intertek put exports to China up 7.5% at 263,610 tons during the period, while SGS pegged Chinese palm purchases at 288,338 tons versus 255,530 tons during Nov. 1-20.

Most traders say prices may decline to the MYR2,450-MYR2,480 range toward the end of the year as investors square positions ahead of year-end holidays.

In other news, Indonesia's trade ministry said it will raise the CPO export tax to 3% in January after keeping it at zero for the past five months, in anticipation of a rise in global palm oil prices.

Palm oil prices at the port of Rotterdam had risen to around $769.20/ton last month, above the $701/ton threshold that would trigger an export tax on Indonesian CPO.

In the cash market, palm olein for January was traded at $765/ton and April/May/June at $770/ton, free on board Malaysian ports, said a Singapore-based trader.

Cash CPO for prompt delivery was offered MYR20 lower at MYR2,500/ton.
Open interest was 84,064 lots Tuesday, down from 84,126 lots. One lot is equivalent to 25 tons.
A total of 19,521 lots of CPO were traded on the BMD, versus 17,906 lots Monday.