Forex - Dollar hits 8-year highs against yen

The broadly stronger dollar rose to eight-year highs against the yen on Tuesday, boosted by the view that the Federal Reserve is on track to raise interest rates later this year.

USD/JPY hit highs of 122.68, the most since July 2007 and was last at 122.49, up 0.77% for the day.

 

The greenback strengthened across the board after Fed Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later this year if the economy continues to improve as expected.

She also attributed a slowdown in first quarter growth to "transitory factors", including a harsh winter.

The greenback received an additional boost after data showed that underlying inflation in the U.S. rose for a third straight month in April.

The dollar’s gains came as markets reopened following a long holiday weekend, after markets in the U.K., Germany and the U.S. remained closed on Monday.

Investors were turning their attention to U.S. data on durable goods orders later Tuesday for a fresh indication on the strength of the economy.

The euro was at one-month lows against the greenback, with EUR/USD down 0.65% to 1.0906.

The euro remained under heavy selling pressure as the prospect of a Greek default continued to weigh.

Athens has warned that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.

EUR/JPY was at 133.58, not far from one-month lows of 133.09 struck overnight.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at five-week highs of 97.06.

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NYMEX crude oil gains in early Asia as on demand prospects

Crude oil prices gained in early Asia on Tuesday as investors looked ahead to demand prospects from a mildly upbeat economic assessment by the Federal Reserve chief last week.

On the New York Mercantile Exchange, crude oil for July delivery rose 0.17% at $59.90 a barrel.

Chair Janet Yellen said that the prospect for higher rates this year is underpinned by signs of a recovery gathering pace, though she reiterated that any decision would be data driven.

Overnight, crude oil futures declined on Monday, as trade volumes were light with U.K. markets closed for a public holiday and markets in the U.S. remaining shut for the Memorial Day holiday.

According to industry research group Baker Hughes (NYSE:NYSE:BHI) on Friday, the number of rigs drilling for oil in the U.S. fell by only one last week to 659, marking the 24th straight week of declines.

Oil traders have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

However, the rate of decline has slowed in recent weeks, fuelling concerns that some shale oil companies will dial up their output in the months ahead if prices stabilize near current levels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery was last quoted at $65.44 a barrel.

Concerns over the prospect of a Greek default continued to dominate market sentiment. Greece’s Interior Minister Nikos Voutsis warned on Sunday that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.

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Malaysia: Shares open lower on Tuesday morning

Malaysia share prices fell on Tuesday morning with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 6.44 points to 1,760.94 points.

Volume was 34.2 million lots worth RM21.2 million.

Gainers outnumbered losers 109 to 73.

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Malaysia: Stocks open lower on Monday

Malaysia share prices slipped on Monday morning with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 0.48 points to 1,787.02 points.

Volume was 30.2 million lots worth RM 8.6 million.

Gainers outnumbered losers 89 to 51.

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Oil prices edge up on firm Asian, US demand

[SINGAPORE] Crude oil futures edged up on Monday, buoyed by healthy Asian appetite and demand from the U.S. driving season.

Front-month Brent crude prices had gained 2 cents to US$65.39 per barrel by 0312 GMT. US crude prices were up 14 cents at US$59.86 a barrel. "Global oil demand continues to surprise to the upside, with April data showing no signs of slowdown despite a pick-up in prices," Energy Aspects said.

Japan's customs-cleared crude oil imports rose 9.1 per cent to 3.62 million barrels per day (17.28 million kilolitres) in April from the same month a year earlier, the Ministry of Finance said on Monday.

In China, crude imports hit a record 7.4 million barrels per day in April despite a slowing economy, driven largely by healthy car sales. "We expect Chinese imports to be high in H2 15, potentially averaging 7.5 million barrels per day. This is due to the start-up of 39 mb (million barrels) of commercial storage, five SPR (strategic petroleum reserve) sites and linefill for Kunming refinery-buying for which is ongoing we believe, even though the refinery won't start up till early 2016," Energy Aspects said.

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Malaysia: Shares up 1.25 points on Wednesday

Malaysia share prices opened slightly higher on Wednesday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index up 1.25 points to 1,810.97 points.

Volume was 48.6 million lots worth RM 18.6 million.

Gainers outnumbered losers 91 to 51.

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Stocks to watch: GSS Energy, Accordia Golf Trust, Noble Group

THE following Singapore companies issued announcements on Tuesday that may affect their trading activity.

GSS Energy has invested S$5 million into Ramba Energy to participate in the latter's exploration programme at the West Jambi block in Sumatra, Indonesia.

This represents an expansion of GSS's existing operations in Central & East Java into Sumatra, which will enhance the group's overall growth potential, said GSS.

Accordia Golf Trust (AGT) - which debuted on the Mainboard last August - has posted a maiden distribution per unit (DPU) of 5.16 yen (5.71 Singapore cents) for the period from August 1, 2014, to March 31, 2015 (FY2014/2015).

Net profit attributable to unitholders for the period came up to 2.6 billion yen. Total operating income stood at 33.4 billion, 2.2 per cent below AGT's forecast, due to "unfavourable weather conditions and discounts given during winter season to attract more visitors", said AGT.

Commodity trader Noble Group said it has successfully closed a US$2.3 billion committed unsecured revolving loan facility from 35 global banks.

The sum will be used for the refinancing of "certain of its existing debt" and general corporate purposes, Noble said in a statement.

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Malaysia: Shares open lower

Malaysia share prices opened slightly lower on Tuesday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 4.45 to 1,819.05 points.

Volume was 79.3 million lots worth RM 36.1 million. Gainers outnumbered losers 127 to 62.

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Malaysia's Petronas to delay start-up of Johor petrochemical complex

[KUALA LUMPUR] Malaysia's state-owned oil and gas company Petronas is delaying the start-up of its huge RAPID refining and petrochemical complex in the southern state of Johor until mid-2019, back from early that year, its top executive said on Monday.

"For the refinery, the start up will be middle of 2019. That is the current schedule," President and Group Chief Executive Officer Wan Zulkiflee Wan Ariffin said on the sidelines of the Asia Oil and Gas Conference in Kuala Lumpur.

All of the engineering, procurement and construction contracts have been awarded for the refinery, while the petrochemical plant is still being tendered, he said.

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Malaysia: Share prices edge up on Monday morning

Malaysia share prices opened slightly higher on Monday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index up 0.78 points to 1,812.7 points.

Volume was 62.8 million lots worth RM 17.44 million.

Gainers outnumbered losers 129 to 59

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Hot stock: YuuZoo shares up 8.092 per cent in morning trade

SHARES of mainboard-listed Internet stock YuuZoo surged 8.092 per cent or S$0.014 to S$0.187 as at 10.30am, making it one of the most actively traded stocks on Monday morning.

It opened 0.1 Singapore cent higher at 1.8 Singapore cents before hitting a high of 1.89 Singapore cents at about 9.20am. Some 29.1 million shares changed hands.

On Friday, the social networking and e-commerce firm posted a net profit of US$3.2 million for the first quarter ended March 31, 2015, reversing a loss of US$1.1 million from a year ago, on the back of a 58 per cent rise in revenue to US$9.6 million, due mainly to high margins on the sale of franchise licences in Turkey and South Korea

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Singapore: STI up 3.67 points at opening, following gains on Wall Street

THE Straits Times Index (STI) rose by 3.67 points or 0.11 per cent to 3,466.77 as at 9am on Monday, following last week's rebound on Wall Street stocks lifted by encouraging data on the US jobs market and inflation.

Among the most active stocks out of the gate were OLS, up 16.67 per cent or 0.1 Singapore cent at 0.7 Singapore cent; EMS Energy, up 8.7 per cent or 0.2 Singapore cent at 2.5 Singapore cents; and YuuZoo, up 3.47 per cent or 0.6 Singapore cents at 17.9 Singapore cents.

A total of 53.3 million shares worth S$34.2 million had changed hands as at 9.02am. Gainers outnumbered losers 93 to 60.

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Oil prices lower in Asian trade

Oil prices sank in Asia on Friday on concerns about unrelenting global production levels despite lofty supplies, analysts said.

US benchmark West Texas Intermediate for June delivery fell 15 cents to US$59.73 while Brent crude for July fell six cents to US$66.64 in late-morning trade.

Nicholas Teo, market analyst at CMC Markets in Singapore, said prices "faltered" after the International Energy Agency (IEA) said slowing US shale oil output was being offset by higher production elsewhere.Mr Teo said higher output by the Opec cartel indicated it is "winning the price war by taking market share back from the Americans".

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Dollar slips as US pipeline inflation turns negative

[NEW YORK] The dollar fell for a third straight day on Thursday as negative US inflation data underlined weakness that could forestall the Federal Reserve's plan to raise ultra-low interest rates.

While the latest US jobless claims report showed the labor market on a tightening course, one of the Fed's key objectives along with price stability, the government reported US producer prices unexpectedly resumed their downward trend in April, getting the second quarter off to a weak start.

The producer price index fell 0.4 per cent in April, more than wiping out March's 0.2 per cent rise which had been the first increase since last October. Economists on average had expected another 0.2 per cent rise.

"We don't believe the PPI will test the Fed's confidence that inflation will return to its target of 2.0 per cent. However, it is a reminder that disinflation hasn't worked its way through the economy yet," said Ryan Sweet of Moody's Analytics.

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Malaysia: Shares open down on Friday

Malaysia share prices opened lower on Friday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 2.74 points to 1,804.81 points.

Volume was 69.1 million lots worth RM 81.4 million.

Gainers outnumbered losers 122 to 47.

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Stocks to watch: Olam, SIA, Genting Singapore, Hyflux, Raffles Education

AGRIBUSINESS Olam International on Friday posted a net profit of S$31.26 million for its first quarter ended March 31, 2015, down a hefty 92.1 per cent from S$396.13 million in the year-ago period.

The commodity group said net earnings plunged on the back of a net exceptional loss of S$97.2 million in Q1, mainly from the buyback of bonds, while net earnings in the year-ago period had included an exceptional gain of S$293.9 million.

Revenue for the quarter was down 10.7 per cent at S$4.32 billion, from S$4.84 billion in the year-ago period, as sales volume fell 33.2 per cent to S$2.68 billion from S$4.01 billion in the year-ago period, as the company reduced volumes or exited from lower-margin businesses, and instead focused on growing its prioritised platforms.

Singapore Airlines (SIA) on Thursday reported a net profit of S$39.6 million for the fourth quarter of FY14/15, up nearly 47 per cent year on year.

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Mexico stocks lower at close of trade; IPC down 0.51%

Mexico stocks were lower after the close on Tuesday, as losses in the Telecoms Services, Financial Services and Materials sectors led shares lower. At the close in Mexico, the IPC fell 0.51% to hit a new 3-months high.

 

The best performers of the session on the IPC were Gruma, S.A.B. De C.V. (MX:GRUMAB), which rose 2.28% or 4.270 points to trade at 191.060 at the close. Meanwhile, Alfa, S.A.B. De C.V. (MX:ALFAA) added 2.25% or 0.700 points to end at 31.850 and Grupo Aeroportuario Del Pacifico (MX:GAPB) was up 1.59% or 1.720 points to 110.100 in late trade.

The worst performers of the session were Industrias CH, S.A.B. De C.V. (MX:ICHB), which fell 3.05% or 1.980 points to trade at 62.900 at the close. Grupo Elektra, S.A.B. De C.V. (MX:ELEKTRA) declined 2.92% or 11.590 points to end at 385.010 and Compartamos, S.A.B. De C.V. (MX:GENTERA) was down 2.35% or 0.640 points to 26.610.

Falling stocks outnumbered advancing ones on the Mexico Stock Exchange by 70 to 52 and 12 ended unchanged.

Gold for June delivery was up 0.79% or 9.30 to $1192.30 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in June fell 0.04% or 0.03 to hit $60.78 a barrel, while the July Brent oil contract rose 0.36% or 0.24 to trade at $67.39 a barrel.

USD/MXN was down 0.01% to 15.3562, while EUR/MXN rose 0.37% to 17.2015. The US Dollar Index was down 0.43% at 94.70.

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Stocks to watch: Vard Holdings, Ezion, Q&M, SingPost, Rotary Engineering

SHIPBUILDER Vard Holdings on Wednesday announced that its net profit for the first quarter ended March 31, 2015, plunged 89.7 per cent to eight million Norwegian kroner (S$1.43 million), compared to 78 million kroner in the year-ago period, mainly as a result of net foreign-exchange losses and higher interest expenses. Revenues for the quarter was up 14.6 per cent at 3.06 billion kroner, versus 2.67 billion kroner in the corresponding period last year, due to higher activity at the yards with subcontractors. Looking ahead, the group expects new order prospects to continue to be weak in the near and medium term.

Ezion Holdings on Wednesday announced its net profit for the first quarter ended March slipped 9.4 per cent to US$41,010, from US$45,245. Revenue fell 4.6 per cent to US$90.12 million due mainly to the absence of contribution from the marine and offshore logistic support services division as the projects in Queensland, Australia did not go into additional trains as originally planned.

Q&M Dental Group on Tuesday announced plans to acquire eight dental clinics in Singapore for a total of S$20.30 million to be paid in cash and shares. Towards this end, the firm has signed three separate points of agreements which also include the vendors providing guarantees and profit targets amounting to some S$16.10 million, said the firm in an announcement.

Singapore Post (SingPost) on Tuesday posted a 51.6 per cent fall in net profit from S$79.6 million a year ago to S$38.5 million for its fourth quarter ended March 31, 2015. The decrease was due to SingPost changing in the quarter its accounting policy for investment properties from the cost model to the fair value model to improve transparency. Revenue rose 28.7 per cent from S$193.3 million to S$248.1 million, boosted by SingPost's e-commerce and logistics businesses as well as contributions from new acquisitions.

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Perfect Storm For EUR Bonds Will Not Continue, But Watch Out For Fed Hik

European government bond yields have suddenly reversed course, and after a multi-year rally we have seen a historic jump in yields. There is no longer a QE 'scarcity premium' in German bonds and pension funds need to buy less duration when bond yields go up. Put this together with profit-taking, in a situation where the market makers at banks might be less capable of warehousing risk due to tighter regulation, and we have a perfect storm for bonds.
However, there is also a limit to how high yields can go, especially in Europe. We do not believe that the fundamental picture has changed as much as the move higher in yields might indicate. There is also a limit to how long the market can continue to sell-off on positioning. All in all, we do expect the current bond sell-off to stop and EUR yields to stabilise around the current level for the next three to six months.
However, one important factor is the spill-over from the US market, as the first Fed hike moves closer. Hence, given our bearish view on the US market, we see upside for 10-year EUR yields on a 12-month horizon. The ECB is expected to be able to keep yields in the 2y-5y segment in check at the current level and some downside could in fact be seen here.
US yields have also moved higher recently, as the US labour market remains strong, and we continue to expect the Fed to start its hiking cycle September this year followed by a second rate hike in December. Our Fed funds forecast remains well above the forward market, and we project a significant rise in US yields in the 2y-5y segment.
Our forecasts imply that we continue to expect a further widening of the EUR/USD yield spread.
As currency is flowing out of Denmark we now expect Danmarks Nationalbank to hike rates two times this year, leaving the deposit rate at -0.50% year-end.
In Sweden low inflation is expected to trigger a final 10bp rate cut in three months' time.

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Malaysia: Stocks end 6.8 points lower

Malaysian shares closed lower on Tuesday with the Kuala Lumpur Composite Index slipping 6.8 points to 1,798.61.

Some 1.62 billion lots, valued at RM1.7 billion were traded. Losers outnumbered gainers 576 to 240.

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Hot stocks: Pacific Andes, China Fishery among actively traded stocks

PACIFIC Andes Resources Development and its subsidiary, China Fishery Group, are among the most actively traded stocks on Singapore Exchange on Tuesday.

The two stocks saw more than 75 million shares traded altogether.

At 03:47pm, Pacific Andes, a distributor of seafood, was trading around S$0.068 a share, up 0.3 cent or 4.6 per cent. More than 47 million shares changed hands, making it the most actively traded stock on the exchange.

China Fishery, an industrial fishing group, was trading around S$0.205 a share, up 0.7 cent, or 3.5 per cent, on more than 28 million shares. It is the third most actively traded stock.

On Monday, China Fishery said its net profit for the second quarter ended March 31, 2015, fell 75.5 per cent to US$4.3 million year on year, due to the impact of the Peruvian government's closure of the north-centre fishery. Revenue fell 57 per cent to US$76.7 million from US$180 million in the year-ago period.

Its parent, Pacific Andes, reported a 74 per cent drop in net profit to HK$46 million (S$7.9 million) in the second quarter from HK$174 million a year ago. Revenue fell 41 per cent to HK$1.32 billion from HK$2.23 billion.

China Fishery said its net-debt-to-equity ratio has improved from 102 per cent in March 2014 to 73 per cent as at March 28, 2015, well ahead of target. The completion of its rights issue and redemption of the Copeinca notes will bring about a further reduction in gearing levels.

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Crude-oil bulls threatened as shale patch revives drilling plans

[NEW YORK] The rally in crude oil is reviving the US shale boom, threatening speculators who are the most bullish on prices since July.

Money managers increased their net-long position in West Texas Intermediate crude by 3.9 per cent in the seven days ended May 5, US Commodity Futures Trading Commission data show. That's a level last seen toward the start of last year's price crash. Short positions declined to the lowest this year.

A 37 per cent rebound in WTI since March has encouraged companies including EOG Resources Inc. to lay out plans to resume drilling. The shale boom had stalled amid a record decline in rigs seeking oil, and the government is predicting lower output this month. Any acceleration in drilling will raise concern that the US supply glut could worsen.

"We could soon see a second surge of production growth," Stewart Glickman, an equity analyst at S&P Capital IQ in New York, said by phone May 7. "EOG is a rather conservative company so if they are willing to dip their toes back in the water, others will as well." WTI futures gained $3.34 to $60.40 a barrel on the New York Mercantile Exchange in the period covered by the CFTC report.

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Malaysia: Shares open up on Monday

Malaysia share prices opened higher on Monday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index up 2.3 points to 1,809.99 points.

Volume was 20.6 million lots worth RM 7.7 million.

Gainers outnumbered losers 128 to 39.

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Ringgit leads gains in Asian currencies as crude extends rally

[KUALA LUMPUR] Malaysia's ringgit rose, leading gains in Asia, as a rally in crude prices eased concern that falling revenue will harm the oil-exporting nation.

Brent crude has advanced 2.7 per cent this week, taking its increase this year to 19 per cent. That's improved the outlook for the finances of a government that derives around 30 per cent of its revenue from oil. The ringgit is still Asia's second- worst performer over six months, dropping 6.6 per cent as doubts a state investment company can repay its debts raised concern the country could have its credit rating downgraded.

"The ringgit is tracking oil's gains," said Christopher Wong, a Singapore-based senior currency analyst at Malayan Banking Bhd. "Concern about the impact of the risk of a sovereign rating downgrade are slowly dissipating although we are still flagging it as a risk." The ringgit strengthened 1.1 per cent to 3.5710 a dollar as of 11:55 am in Kuala Lumpur, data compiled by Bloomberg show. That's the biggest increase since April 24 and took its gain over the past month to 1.7 per cent.

Fitch Ratings is more likely than not to cut Malaysia's rating due to a worsening trade surplus and concern 1Malaysia Development Bhd won't be able to pay its debts, Andrew Colquhoun, head of Asia Pacific sovereign ratings in Hong Kong, said in a March 18 interview. Fitch rates the nation A-, the fourth-lowest investment grade.

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Singapore: Stocks weaken in low volume

THE Straits Times Index (STI) was pushed up by about 11 points in the final seconds of trading last Thursday, April 30, so it came as no surprise that on Monday, the first trading day of May, the index spent most of the day in the red and eventually ended a nett 4.69 points weaker at 3,482.7.

It also came as no surprise to see penny stock interest continue to dwindle - turnover done was a weak 1.5 billion units worth S$1.02 billion for an average of S$0.68 per unit traded, more than twice the value a month ago. The dollar value done in the STI's 30 components was S$279 million, about 27 per cent of overall business.

As for the broad market's performance, weakness in the index usually means softness all round - and this was borne out by an advance-decline score of 178-287 excluding warrants.

Brokers were not surprised at what was in truth a lethargic session with few redeeming features. The banks for example, enjoyed divergent fortunes - DBS and OCBC fell while UOB rose.

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Malaysia sukuk sales jump to 16-month high as confidence returns

[KUALA LUMPUR] Islamic bond sales in Malaysia jumped this month to the most since December 2013, adding to signs confidence is returning to the world's biggest sukuk market.

Issuance was 23 per cent higher than in March at 11.3 billion ringgit (S$4.24 billion), according to figures compiled by Bloomberg. Sovereign wealth fund Khazanah Nasional Bhd. accounted for 2 billion ringgit and DanaInfra Nasional Bhd, a state-owned company that funds subway construction, raised 3.5 billion ringgit. Malaysia's government drew bids for six times the US$1.5 billion of dollar-denominated sukuk it offered last week and the ringgit is having its best month in three years.

Malaysia is the only net oil exporter among Asia's major economies and its fortunes are heavily influenced by swings in the price of Brent crude, which rebounded 19 per cent this month after slumping in the past three quarters. The ringgit was Asia's worst-performing currency of the last six months after the yen and Fitch Ratings signaled in March the nation's credit rating would probably be downgraded in a coming review.

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