Morning Coffee - 9 July 2012

MARKET ROUNDUP (Source Bloomberg)

U.S. Stocks Fall For Week As Jobs Data, ECB Damp Optimism: as jobs data heightened concern about a slowing economy and Europe’s efforts to tame its debt crisis disappointed investors. The S&P 500 lost 0.6 percent to 1,354.68 for the week, trimming its gain for the year to 7.7 percent. The Dow dropped 107.62 points, or 0.8 percent, to 12,772.47. Global stocks surged the previous week, with the S&P 500 rallying 2 percent, amid optimism that an agreement by European leaders would help contain the region’s debt crisis. The S&P 500 erased a 0.4 percent advance for the week in the final session after American employers hired fewer workers than forecast in June, showing the labor market is making scant
progress toward reducing joblessness. The unemployment rate held at 8.2 percent.

European Stocks Advance For Fifth Week; Arkema Rallies: as investors bet central banks would add to measures to stimulate economic growth. The U.K.’s FTSE 100 increased 1.6 percent, France’s CAC 40 fell 0.9 percent and Germany’sDAX lost 0.1 percent.

Oil Trades Near One-Week Low On Concern Slowdown To Curb Demand: mid speculation fuel demand may falter on an
economic slowdown in China and the U.S., the world’s two largest crude-consuming nations. Downward pressure on the Chinese economy is still “relatively large,” Premier Wen Jiabao said yesterday. West Texas Intermediate oil for August delivery was at $84.37 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 9:28 a.m. Sydney time. The contract slid $2.77 on July 6 to close at $84.45, the lowest settlement since July 2. Prices are 15 percent lower this year.

CORPORATE NEWS

Brighter year for Handal: The offshore cranemanufacturer and servicing provider recently secured two jobs worth RM300million to provide integrated crane services for ExxonMobil Exploration and ProductionMalaysia Inc and Petronas Carigali Sdn Bhd. For its current financial year ending Dec 31, 2012, Handal is looking at a 10-12% growth in revenue and net profit, which will be boosted by existing and new offshore crane jobs.

SunBiz

More spark for Malaysia power sector soon: Malaysia's gas supply has been inconsistent for the past three years due to numerous factors such as unpredictable shutdowns at Petroliam Nasional Bhd (Petronas)'s offshore platforms and other gas sources. As a result, gas supply was limited and had to be distributed between the power and non-power sectors. Supply interruptions were particularly bad last year and more so last month. Gas supply, however, is expected to improve once the Petronas regasification complex in Malacca comes on stream by September and planned shutdowns and regular maintenance works are carried out. Gas-fired plants make up 53 per cent of power plants in the country, followed by coal (40 per cent) and hydro (5 per cent).

Btimes

Palm oil prices expected to remain volatile this week: the current market sentiment and uncertain global economy coupled with speculation would influence palm oil's performance this week. For the week just-ended, futures prices were mostly up supported by higher demand as bad weather disrupted soybean oil production in the United States.

Chip-makers see good third quarter: Sales in Q3 are expected to remain flat, maintaining the same level as the second quarter. Moving into Q4, the book-to-bill ratio is expected to dip below one, due to the European crisis, unemployment in the United States, and an overheated China economy. (A book-to-bill ratio of above one indicates that more orders are received than filled, and hence a strong market where demand outpaces supply. Similarly, a book-to-bill ratio of below one indicates weaker demand.)

StarBiz

Source:Jupiter Securities Research 09 July 2012