A Cup of Tea 23 July'10

Most Southeast Asian stock markets fell on Thursday, fretting over a downbeat economic view from the U.S. Federal Reserve, and weaknesses in energy prices dampened sentiment in the sector across the region. Malaysia eased 0.4%, retreating from a two-day rally to 10-week highs, Indonesia, which scaled a record high at one point, ended down 0.1%, the Philippines lost 0.1% and Vietnam fell 1%. Thailand ended up 0.25%, however, although it was in negative territory part of the day, while Singapore rose 1% to 2,955.67 amid optimism about the earnings of big firms.

Stocks had their biggest rally in two weeks Thursday as earnings and economic reports reassured investors that the recovery, while uncertain, is continuing. The Dow rose 201.77, or 2 percent, to 10,322.30. That was the Dow's biggest advance since it rose 274 points on July 7.

Meanwhile, European markets rose after a report showed unexpected growth in the 16-nation group that uses the euro. In recent months, investors worldwide have been concerned that rising government debt in Europe would stall a global recovery. A jump in Europe's purchasing managers index Thursday was a relief after forecasts of a possible recession on the continent.

On the London Metal Exchange, copper for three-months delivery CMCU3 closed up $160 at $7,010 a tone. Tin CMSN3 was untraded at the close but last bid at $18,550 a tonne from a last quote of $18,370/$18,375 on Wednesday. It earlier hit a near three-month high at $18,600. Nickel CMNI3 ended at $20,250 a tonne from a last quote of $19,495/$19,500, down from an earlier peak and three-week high at $20,251.

It's a combination of factors; Inventories continue to be drawn down on the LME. If you look at what the fundamentals have been doing – they are shaping up to be quite positive.

Crude palm oil futures on Malaysia’s derivatives exchange rose as much as 2.8% intraday to a two-month high Thursday, fuelled by increased demand in the physical market as countries in the region gear up for major festive periods. Also supporting the rise in prices were expectations for weaker production due to lower yields in the top palm-oil producing state of Sabah, growers and trade participants said.
Preliminary data from an industry body Thursday said output so far this month has only risen 1.5% from the same period last month, which may lead to a drawdown in palm inventory levels as demand is likely to outpace supply. With La Nina weather now underway, recent heavy rain in several oil-palm growing regions is already hurting output growth, although it is likely to boost yields in the future, an executive at a major Malaysian trading house said.

What about our market?
Inflow was healthy, our market will continue to be strengthening again and will trying to get 3030 level index for today. Indonesian rupiah still stable, this is sign that foreign investor still on the market. Like I ever said before, my focus still on commodity sector for better yield in the midterm investment. My assuming that better economic outlook will trigger demand for any commodity. And so far some commodity stocks still undervalue versa JSX. I believed that oil will try to touch $80/barrel before Q3 and S100/barrel at 2011. I really high recommended to accumulation and hold some commodity stocks especially on base metal, coal/energy and CPO.

TLKM, INCO, TINS, LSIP, UNTR, PTBA, ASII, BMRI, BBNI and some property stocks will be a trigger for today’s.

Happy Hunting and don’t forget to take some profit.


Bang Juntri
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