Monday, November 26, 2012

RTRS- Indonesia keeps Dec crude palm oil, cocoa export taxes unchanged

JAKARTA, Nov 26 (Reuters) - Indonesia, the world's top palm oil producer, will keep its export tax for crude palm oil unchanged at 9 percent for December, and leave its tax on cocoa bean exports unchanged at 5 percent, a trade ministry official said on Monday.

The government will also keep the export tax for RBD palm olein unchanged at 3 percent for December.

RTRS- HSBC China flash PMI at 13-month high as growth quickens

BEIJING, Nov 22 (Reuters) - China's vast manufacturing sector saw expansion accelerate in November for the first time in 13 months, preliminary results from a factory survey showed, a sign that the pace of economic growth has revived after seven consecutive quarters of slowdown.

The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) rose to a 13-month high of 50.4 in November, the latest indicator of recovery in the real economy after data showing solid credit growth, firmer exports and rising industrial output in the previous month.

A sub-index measuring output rose to 51.3, also the highest since October 2011.

"This reflects that conditions for smaller firms, especially exporters, are looking up," said Li Wei, a Shanghai-based economist for Standard Chartered. "The consensus in the market is already for a small, gradual improvement."

An uptick in key economic activity indicators in October, following encouraging signs in September, cemented the view of many analysts and investors that a rebound in the world's second largest economy gathered momentum as it entered the fourth quarter, thanks to a raft of pro-growth policies rolled out by the government over recent months.
China is currently shuffling its senior officials after the seven top leaders of the ruling Communist Party were selected at a congress last week. The new appointments should end months of uncertainty in the highest ranks, although economic policy is not expected to change abruptly in the near-term.
Even before the congress, the central bank had moved to ease liquidity by pumping short-term cash into money markets rather than resorting to the interest rate cuts or reduction in banks' required reserve ratios that many investors had expected.



STEADY THROUGH YEAR-END

This month's PMI reading above 50 is likely to be seen as a turning point by the market, particularly if it is born out by the final reading due on Dec. 1 and by official indicators.

Asian shares .MIAPJ0000PUS extended gains slightly after the data to stand up nearly 1 percent on the day and the Australian dollar AUD=D4, sensitive to demand from the biggest customer for Australia's resources, rose as far as $1.04.

"This confirms that the economic recovery continues to gain momentum towards the year-end," Qu Hongbin, chief China economist at index sponsor HSBC, said in a statement accompanying the data.

"However, it is still the early stage of recovery and global economic growth remains fragile. This calls for a continuation of policy easing to strengthen the recovery."

With a one-month exception in October 2011, the HSBC PMI -- which largely reflects the private manufacturing sector -- has remained stubbornly below the 50-point level separating accelerating from slowing growth since June 2011.

Unlike the patchy results seen in previous months, in November almost all the sub-indices in the HSBC survey concurred in showing an improving economy.

The one exception was a fall in the sub-index measuring output prices, demonstrating that manufacturers are still struggling with overcapacity and relatively weak domestic demand.

That could also reflect the weight in the survey of exporting firms, which have less ability to raise sales prices, said Standard Chartered's Li.

Indeed, China's exporters are increasingly squeezed by rising domestic costs and competition from new international suppliers, Zhou Haijiang, head of Chinese textile exporter Hodo Group, told reporters this month.

"Not only Western countries manufacture industrial goods, but also a lot of developing countries including former socialist countries who now have market economies are all exporting, thus creating a global surplus that cannot be changed," Zhou said.

"Because of this it is hard to raise sales prices, everyone is selling and it is hard for manufactured goods prices to rise. In some cases prices have even fallen."

Analysts expect no further cuts to interest rates this year or next after back-to-back cuts in June and July, and only one more 50 basis point cut to banks' required reserve ratios (RRR) in 2012 after three since late 2011 that have freed an estimated 1.2 trillion yuan for new lending.
Chinese banks are on course to make new loans worth more than 8.5 trillion yuan ($1.4 trillion) in 2012, expansionary versus the 7.5 trillion of new loans extended in 2011 and above the 8 trillion yuan that sources told Reuters back in February was the target for 2012.

Total social financing aggregate, a broad measure of liquidity in the economy, weakened to 1.29 trillion yuan in October, down from 1.65 trillion yuan in September, but still remained on track to hit a record 14 trillion yuan this year.

China also opened many previously-closed sectors to private investment with a view to funding new infrastructure projects and supporting economic growth without piling on more debt that local governments can ill-afford.

Although analysts expect fourth quarter GDP growth to outpace the 7.4 percent seen in the third quarter, full-year expansion for 2012 is expected to be the slowest in 13 years.

Trader's Highlight

DJI- NEW YORK, Nov 23 (Reuters) - U.S. stocks rose for a fifth day during a holiday-shortened, thinly traded session on Friday as investors picked up recently beaten-down shares of large technology companies.

Market participants were also encouraged by signs of progress in talks about releasing aid to debt-saddled Greece and piled into U.S. retail shares as Black Friday got the holiday shopping season under way.

U.S. stock market trading ended early and was closed on Thursday for the Thanksgiving holiday.

Volume was the lightest of the year, though the session was abbreviated. Shares of big-cap technology companies climbed as investors took advantage of the day's upward momentum to add to positions, helping the S&P 500 rack up its second best week of 2012.

"Anyone that was on the sidelines waiting for a pullback like the one we just had in some of the tech names, they're looking for any glimpse of strong price action for 'permission' to enter into those (stocks)," said Todd Salamone, director of research at Schaeffer's Investment Research in Cincinnati, Ohio

Microsoft MSFT.O helped lift the Nasdaq, gaining 2.8 percent to $27.70, while Apple Inc AAPL.O rose 1.7 percent to $571.50.

From mid-September to mid-November, the S&P tech sector .GSPT shed about 13 percent as the broader market also dropped.

Research in Motion RIMM.O surged on optimism about its soon-to-be-launched BlackBerry 10 devices that will vie against Apple's AAPL.O iPhone and Android-based smartphones. RIM was up 13.6 percent at $11.66.
Greece said the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. But other sources involved in the talks cautioned the funding gap was far bigger than Greece has suggested.

 
Euro zone finance ministers, the IMF and European Central Bank (ECB) failed earlier this week to agree on how to shrivel the country's debt to a sustainable level and will have a third attempt at resolving the issue on Monday.

The Dow Jones industrial average .DJI gained 172.79 points, or 1.35 percent, to 13,009.68. The Standard & Poor's 500 Index .SPX rose 18.12 points, or 1.30 percent, to 1,409.15. The Nasdaq Composite Index .IXIC climbed 40.30 points, or 1.38 percent, to 2,966.85.

The S&P 500 broke a two-week losing streak to rise 3.6 percent. Stocks had tumbled earlier in the month on worries about the impact of tax and spending changes set to take effect from January, but hopes that politicians will reach a deal to avert the so-called fiscal cliff helped the market recoup some of those declines this week.

The Dow and S&P 500 both closed above key technical levels for the first time since Nov 6, which could provide additional support. The Dow ended above 13,000, while the S&P broke above 1,400.

The Dow rose 3.3 percent for the week, while the Nasdaq jumped 4 percent. The Nasdaq had ended lower for the previous six weeks in a row.

Volume was about 2.8 billion shares on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of over 6 billion.

Advancers outnumbered decliners on the NYSE by 2,407 to 469 on the New York Stock Exchange. On the Nasdaq, advancers had the lead, with 1,775 stocks gaining and 548 shares declining.

The retail sector rose as investors looked for signs of how much consumers are spending as stores lured shoppers with Black Friday deals and discounts.

Black Friday, the day after Thanksgiving, kicks off the U.S. Christmas shopping season for retailers and is often the busiest shopping day of the year. The National Retail Federation expects sales during the holiday season to grow 4.1 percent this year compared with last year's 5.6 percent increase.

If the traffic and sales numbers look strong early on, "it usually gives a sense that the season will be in line with expectations," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"The way that could work against a stronger retail season is if there's no follow-through, there could be discounting on the part of retailers."

NYMEX- NEW YORK, Nov 23 (Reuters) - U.S. crude oil futures settled up 90 cents at $88.28 a barrel on Friday, lifted by fresh protests in Egypt and optimism about talks on releasing aid to Greece.

CBOT SOYBEAN-Soybean futures on the Chicago Board of Trade rose in a holiday-shortened session, lifted by a weaker U.S. dollar and bullish economic data in China, the world's top soy buyer, traders said.
* CBOT December options expired at the close.

* Optimism about a deal to help Greece, hopes that U.S. lawmakers can agree on a solution to avoid a fiscal crisis, and data showing an improving global economic outlook have pressured the dollar and driven a rally in riskier asset markets, including commodities, this week.

* For the week, CBOT soybeans Sc1 settled up 2.7 percent, rebounding after three straight weekly losses that drove the market to a five-month low.
• China's manufacturing sector saw expansion accelerate in November for the first time in 13 months, preliminary data showed Thursday, a sign that the pace of economic growth in the world's biggest soy buyer has revived after seven consecutive quarters of slowdown.
• On a bearish note, China's soybean imports will grow at their slowest pace in six years this marketing year as sluggish demand and poor crushing margins dent Chinese purchases, a Reuters poll showed.
• Spot basis bids for soybeans shipped by barge to the U.S. Gulf Coast mostly held steady early Friday amid a lack of selling by farmers, traders said.
• Traders continue to watch the Mississippi River amid concerns that low water levels could slow shipping. The U.S. Coast Guard has said it did not expect a river closure between St. Louis and Cairo, Illinois, but that restrictions on drafts and tow sizes were likely at some point.
• USDA reported export sales of U.S. soybeans in the latest week at 543,600 tonnes, within a range of trade estimates for 400,000 to 650,000 tonnes.
• USDA pegged weekly U.S. soymeal sales at 197,800 tonnes, slightly below a range of trade estimates for 200,000 to 300,000 tonnes.
• USDA reported weekly U.S. soyoil sales at 124,000 tonnes, well above a range of trade estimates for 50,000 to 70,000 tonnes.
• USDA through its daily reporting system on Friday confirmed sales of 20,000 tonnes of U.S. soyoil to unknown destinations for 2012/13 delivery.

• Argentine soy-crushing workers ended a brief strike in three of four soy-processing plants in the Rosario port area on Friday while negotiations with export company Bunge continued, a union official said.
• Brazilian grain industry association Abiove raised its estimate for the already harvested 2011/12 soybean crop to 67.7 million tonnes, from 66.8 million previously, which it said will mean an additional 800,000 tonnes of soybeans for export.

FCPO-SINGAPORE, Nov 23 (Reuters) - Malaysian palm oil futures fell for a fourth straight session on Friday and posted a third weekly loss in four, as investors remained concerned over slowing demand for the edible oil as prospects for global economic growth remained dim.

Investors were also cautious ahead of a European meeting on Monday, when international lenders would gather for a second time to reach a deal to release emergency aid for Greece.
Malaysia, the world's second largest palm oil producer, exported less of the edible oil for the first 20 days of the month compared to October, fuelling concerns over its inventories that have hovered near record high levels.

"The market is still worried about exports, which slowed down due to the slew of holidays last week," said a trader with a foreign commodities brokerage in Malaysia.

"The question everybody is asking now is whether end stocks will be lower or slightly higher. I think it should be going down with lower production."

The benchmark February contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 0.7 percent to close at 2,395 ringgit ($783) per tonne.

Total traded volumes stood at 32,946 lots of 25 tonnes each, higher than the usual 25,000 lots.

Technicals showed a bearish target at 2,321 ringgit remains intact for palm oil based on a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.

 
For the week, futures lost 1.4 percent on worries that the U.S. budget crisis, and the euro zone's ongoing financial woes, could weigh on demand.

Malaysian shipments of the tropical oil fell 3.3 percent and 3.8 percent for the Nov. 1-20 period from a month ago, cargo surveyors Intertek Testing Services and Societe Generale de Surveillance said respectively.
Traders are hoping the annual price outlook conference, organised by the Indonesia Palm Oil Association on next Thursday and Friday, would provide more perspective.

In related markets, Brent crude slipped towards $110 a barrel on Friday as weak data from Europe raised concerns about global demand and a ceasefire in the Gaza Strip eased supply concerns, offsetting positive manufacturing data from China.

 
In other vegetable oil markets, the most active May 2013 soybean oil contract DBYcv1 on the Dalian Commodity Exchange closed 0.2 percent higher. The U.S. financial markets were closed for the Thanksgiving holiday.

REGIONAL EQUITY- Nov 23 (Reuters) - Major Southeast Asian stock markets edged up on Friday, with Philippines rising to a record close, helped by optimism over the global economy and progress in Greece aid talks, while solid manufacturing surveys in the United States and China lifted sentiment.

The Philippines .PSI, the region's best performer this year, gained 0.7 percent to a record closing high of 5,552.34, led by banks. The index rose 2.1 percent this week.

Indonesia .JKSE gained 0.3 percent, led by banking shares, to its highest close since Nov. 14 with a foreign inflow of $30 million.

Thailand .SETI edged up 0.2 percent, helped by energy shares, while Singapore .FTSTI gained for a fifth straight session to end 0.1 percent higher.

Bucking the trend, Malaysia .KLSE ended down 0.3 percent, witnessing a net foreign selling of $12.56 million. Vietnam .VNI lost 0.4 percent on bad debt and economic woes.