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Oct 2016 27

Ringgit extends gains against US$, hits new high against pound

PETALING JAYA: The ringgit continues to strengthen against the US dollar, alongside several other Asian currencies, as US policymakers continue to play down the possibility of an interest rate hike so close to the US...

PETALING JAYA: The ringgit continues to strengthen against the US dollar, alongside several other Asian currencies, as US policymakers continue to play down the possibility of an interest rate hike so close to the US presidential election.

Globally, stock markets slipped as crude oil prices traded lower. Analysts reckoned that there would be no rate hike in November because of the presidential election, but said there could be one in the December meeting.

The ringgit has been on an upswing lately, strengthening for eight days in a row since Oct 17 against the greenback to 4.158 yesterday.

The ringgit touched a new high against the pound sterling at 5.08, the highest since September 2013.

 

AllianceDBS Research chief economist Manokaran Mottain said the US presidential election and lower anticipation of interest rate hike in November by the US Federal Reserve has increased the uncertainty in the US dollar.

“Although Hillary Clinton is heading the poll, the results could be different as we saw during the Brexit referendum. The uncertainties in the election results and interest rate hike by the Fed has impacted the US dollar rally,” he said.

However, Manokaran noted that the ringgit would continue to move in tandem with crude oil prices.

Meanwhile, AmResearch said Budget 2017, in which the Government has maintained a fiscal deficit target of 3% against gross domestic product, coupled with the earlier weakness in the ringgit over the past one month, could “reignite” buying interest into local assets.

“That could moderate the depreciation pressure of the ringgit against US dollar,” it said in a recent report.

RAM Ratings said in a report that the income-supporting policies announced under Budget 2017 would contribute positively to the economic growth next year, and alleviate some of the pressure on monetary policy.

However, RAM said there could still be space for another cut in the benchmark overnight policy rate next year should external demand continue to weigh on the Malaysian economy.

Maybank Kim Eng head of foreign exchange research Saktiandi Supaat said the pound sterling has fallen by more than 20% against the US dollar this year. He added that data pointed to more weakness ahead for the pound sterling with the pound sterling-ringgit cross rate seen at 5.06 levels.

The Fed raised the federal funds rate last December by 25 basis points, while the minutes of the September Federal Open Market Committee meeting showed that policymakers were deeply divided over the next rate hike.

The FTSE Bursa Malaysia KL Composite Index yesterday closed 3.16 points or 0.2% alongside with other Asian markets after the US shares finished lower on Tuesday while crude oil prices slipped.

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Oct 2016 26

'Siri, catch market cheats': Wall Street watchdogs turn to AI (The Star)

 Siri to the rescue: AI could be quicker to catch manipulative behaviour thought to contribute to "flash crashes" and may even sniff out new types of chicanery. — ReutersNEW YORK: Artificial intelligence programs...

 

Siri to the rescue: AI could be quicker to catch manipulative behaviour thought to contribute to "flash crashes" and may even sniff out new types of chicanery. — Reuters

Siri to the rescue: AI could be quicker to catch manipulative behaviour thought to contribute to "flash crashes" and may even sniff out new types of chicanery. — Reuters

NEW YORK: Artificial intelligence programs have beaten chess masters and TV quiz show champions. Next up: stock market cheats. 

Two exchange operators have announced plans to launch artificial intelligence tools for market surveillance in the coming months and officials at a Wall Street regulator tell Reuters they are not far behind. Executives are hoping computers with humanoid wit can help mere mortals catch misbehaviour more quickly. 

The software could, for instance, scrub chat-room messages to detect dubious bragging or back slapping around the time of a big trade. It could also more quickly unravel complex issues, like "layering," where orders are rapidly sent to exchanges and then cancelled to artificially move a stock price. 

AI may even sniff out new types of chicanery, said Tom Gira, executive vice-president for market regulation at the Financial Industry Regulatory Authority (FINRA). 

"The biggest concern we have is that there is some manipulative scheme that we are not even aware of," he told Reuters. "It seems like these tools have the potential to give us a better window into the market for those types of scenarios." 

FINRA plans to test artificial intelligence software being developed in-house for surveillance next year, while Nasdaq Inc and the London Stock Exchange Group expect to use it by year-end. 

The exchange operators also plan to sell the technology to banks and fund managers, so that they can monitor their traders. 

Artificial intelligence is the notion that computers can imitate nuanced human behaviour, like understanding language, solving puzzles or even diagnosing diseases. It has been in development since the 1950s and is now used in some mainstream ways, like Siri, an application on Apple Inc's iPhone that can engage in conversation and perform tasks. 

While financial firms are already applying artificial intelligence software for everything from compliance to stock-picking, it is only starting to become useful for market oversight. 

"We haven't really let the machines loose, as it were, on the surveillance side," said Bill Nosal, a Nasdaq business development executive who is overseeing its artificial intelligence effort. 

50 billion events

Market surveillance generally relies on algorithms to detect patterns in trading data that may signal manipulation and prompt staff to investigate. 

But the sheer volume of data can lead to an overwhelming number of alerts, many of which are false alarms. 

FINRA monitors roughly 50 billion market "events" a day, including stock orders, modifications, cancellations and trades. It looks for around 270 patterns to uncover potential rule violations. It would not say how many events are flagged, or how many of those yield evidence of misbehaviour. 

The "machine learning" software it is developing will be able to look beyond those set patterns and understand which situations truly warrant red flags, said Gira. 

Machine learning is a subset of artificial intelligence in which computers figure out new tasks without having been programmed to do so. In the case of market surveillance, that would mean the computers "learn" which trading patterns lead to enforcement charges, in order to flag the right ones. 

FINRA plans to test the new tool next year alongside its existing systems to compare the results. 

The regulator has already moved its surveillance systems to Amazon.com Inc's web-based Cloud, giving it more computing power to quickly analyse massive data. 

Nasdaq is working with cognitive computing firm Digital Reasoning, which it invested in earlier this year. 

LSE has teamed up with International Business Machine Corp's Watson business and cybersecurity firm SparkCognition to develop its AI-enhanced surveillance, Chris Corrado, chief operating officer of LSE Group, told Reuters in an interview. Watson has become something of a household name, having bested contestants in the game show "Jeopardy" in 2011. 

Trader integrity

The technology would not necessarily prevent events such as the 2010 "flash crash," when the Dow Jones Industrial Average temporarily plunged more than 1,000 points. 

However, it could be quicker to catch manipulative behaviour thought to contribute to them, potentially saving market watchdogs time and money. 

FINRA, Nasdaq and LSE would not provide specific figures for how much the software costs to develop or how much money they expect it to save. 

For instance, investigators spent years cross-referencing trading data with old electronic communications to make their case against a group of global banks whose traders were rigging foreign exchange benchmarks. 

Nasdaq said the software it is testing with Digital Reasoning and other financial firms could do that task almost in real time. 

Artificial intelligence startup Neurensic on Wednesday launched a tool that creates an "integrity score" for traders based on how their trading patterns match up against patterns regulators have deemed suspicious. 

"To have that information in terms of running your business more efficiently or proactively avoiding regulatory troubles is huge," said David Widerhorn, the firm's chief executive. 

Neurensic has also worked with regulators on market-manipulation investigations and is in talks with two exchanges on supplying artificial intelligence software for surveillance, he said. — Reuters

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Oct 2016 25

Bursa Malaysia opens slightly higher (Malay Mail)

At 9.17am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 0.48-of-a-point stronger at 1,678.24, against yesterday’s close of 1,677.76. — Reuters picKUALA LUMPUR, Oct 25 — Bursa Malaysia opened slightly higher today on...

At 9.17am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 0.48-of-a-point stronger at 1,678.24, against yesterday’s close of 1,677.76. — Reuters pic

At 9.17am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 0.48-of-a-point stronger at 1,678.24, against yesterday’s close of 1,677.76. — Reuters pic

KUALA LUMPUR, Oct 25 — Bursa Malaysia opened slightly higher today on buying interest and in tracking overnight gains on Wall Street following upbeat US earnings data.

At 9.17am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 0.48-of-a-point stronger at 1,678.24, against yesterday’s close of 1,677.76.

The index opened 0.32 of-a-point easier at 1,677.44.

However, market breadth was positive as gainers led losers 134 to 120, while 194 counters were unchanged, 1,231 untraded and 20 others suspended.

Turnover stood at 118.62 million shares worth RM51.96 million.

A dealer said US markets were firmer last night after the release of corporate earnings which pointed to resilience in the global economy.

The Dow Jones Industrial finished Monday up 0.46 per cent, while the S&P 500 gained 0.47 per cent and the Nasdaq 0.91 per cent.

Kenanga Research in a note said if the FBM KLCI swiftly takes out its immediate 1,680 resistance, it could set a sight on 1,700 and further up.

“However, an unsuccessful attempt to clear the 1,680 hurdle could see the local bourse retracing towards 1,672, throughout the day,” it said.

Of the heavyweights, TNB, TM and Public Bank went down two sen each to RM14.32, RM 6.56 and RM19.80 respectively, Maybank added three sen to RM7.76 and Petronas Chemicals was flat at RM6.98.

Of the gainer counters, Hong Leong Industries and KL Kepong improved 10 sen each to RM15.70 and RM24.38 respectively, Alliance Group rose six sen to RM3.92 and Gadang Holdings gained five sen to RM3.36.

The FBM Emas Index was up 2.45 points to 11,848.44, the FBM Emas Shariah Index lost 1.74 points to 12,474.04, and the FBMT 100 Index was 3.00 points higher at 11,547.02.

The FBM 70 rose 2.45 points to 13,853.26 as the FBM Ace increased 1.81 points to 5,136.13.

The Plantation Index improved 8.53 points to 7,955.37, the Industrial Index declined 0.93 of a point to 3,163.38 and the Finance Index bagged 3.27 points to 14,488.58. — Bernama

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Oct 2016 24

Ignored small-cap stocks set to see revival in fortune (The Star)

BY INTAN FARHANA ZAINULandAFIQ ISA   PETALING JAYA: Small-cap stocks that are often ignored by institutional funds are set to see a revival in fortune. Government-linked Investment Companies (GLICs) would...
 
“I believe the prime minister was referring to GLICs outsourcing or dedicating collectively RM3bil for investment in small and mid-cap stocks.  “We will do our part in pursuing this. Details to be worked out later,” Permodalan Nasional Bhd group chairman Tan Sri Wahid Omar told StarBiz.
 
 
PETALING JAYA: Small-cap stocks that are often ignored by institutional funds are set to see a revival in fortune. Government-linked Investment Companies (GLICs) would set aside RM3bil to be invested in small and medium capitalised stocks over the next year or so.
 
According to the heads of several GLICs, the RM3bil is “fresh money” to be invested over time and separate from the existing investments.
 
Prime Minister Datuk Seri Najib Tun Razak announced during Budget 2017 on Friday that a special fund of RM3bil would be set up to invest in small and medium cap companies. The money would come from GLICs.
 
According to several GLICs’ head honchos, the RM3bil would come from several GLICs.
 
“I believe the prime minister was referring to GLICs outsourcing or dedicating collectively RM3bil for investment in small and mid-cap stocks.
 
“We will do our part in pursuing this. Details to be worked out later,” Permodalan Nasional Bhd group chairman Tan Sri Wahid Omar told StarBiz.
 
At present, most GLICs have already invested in small and medium-cap companies, though the stakes held are relatively small compared to their investments in the large caps.
 
While shares of large caps are known for their stability and steady dividends, small and medium cap companies offer the prospect of higher capital appreciation. However, the problem with small cap companies is liquidity of the shares.
 
In recent years, some investment firms such as Retirement Inc Fund (KWAP) have begun buying up stakes in smaller companies, while the Employees Provident Fund (EPF) has reiterated its commitment towards more investments in the mid-cap space.
 
According to KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad, the RM3bil is “fresh money” from GLICs, hence the fund would increase its investment mandate to cover the small and medium cap companies.
 
“To date, KWAP has already invested in small and mid-cap stocks totalling RM750mil. The investment is done through our internal and external fund managers.
 
“We hope that with this initiative, the listed companies will reciprocate by improving their governance, cost structure and business performance as well as to reward shareholders with good dividend,” he said when contacted.
 
KWAP had introduced a specific mandate to invest in small and medium cap stocks more than two years ago.
 
Wan Kamaruzaman said the fund’s definition of small and medium cap stocks are those that have a market capitalisation of below RM2bil.
 
Whereas for EPF, small and medium cap stocks are defined as those below RM1bil.
 
Another measure announced during the budget is the establishment of the Capital Market Research Institute with an initial funding of RM75mil.
 
The Government said the Small and Mid-Cap PLC Research Scheme will be introduced to conduct research on 300 companies.
 
EPF chief executive officer Datuk Shahril Ridza Ridzuan said the scheme would lead to more interest and trade activities in the small and medium cap space and that the fund was open to new investment opportunities.
 
“The scheme will encourage more companies to view Bursa Malaysia as a viable avenue for capital raising. We are keen to find more good companies to add to our existing portfolio,” he said.
 
Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan said the special fund that would be allocated by GLICs would certainly be an added boost for small and mid-cap companies as there would be a greater pool of investors for these companies to tap.
 
“The Small and Mid-Cap PLC Research Scheme and the GLICs’ RM3bil special fund should create a sustainable ecosystem to promote the visibility and vibrancy of these 300 companies,” he said in a statement on Friday.
 
There are 747 companies listed on Bursa Malaysia with market cap of less than RM1bil and 111 companies valued from RM500mil to RM1bil, according to Bloomberg data.
 
However, small-cap companies in Bursa Malaysia has underperformed the broader market this year. To date, the FBM Small Cap Index has declined by 2.89% while the benchmark FBM KLCI has shed 1.37%.
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Oct 2016 21

What Malaysians want in Budget 2017 (Malay Mail)

 BY IDA LIM, YISWAREE PALANSAMY AND ZURAIRI ARMalay Mail Online asked several groups for their input on what they wish the government to introduce tomorrow’s Budget 2017 that will help ease their financial worries. —...

 

BY IDA LIM, YISWAREE PALANSAMY AND ZURAIRI AR

Malay Mail Online asked several groups for their input on what they wish the government to introduce tomorrow’s Budget 2017 that will help ease their financial worries. — Reuters picMalay Mail Online asked several groups for their input on what they wish the government to introduce tomorrow’s Budget 2017 that will help ease their financial worries. — Reuters pic

 

 

 

 

 

 

 

 

 

 

 

 

KUALA LUMPUR, Oct 20 — It has been arguably a miserable year on the wallet for many Malaysians who have seen their living costs rise due to the ringgit’s depreciating value caused in part by external economic forces.

With economists saying the grim outlook is likely to continue into the new year, Malay Mail Online asked several groups for their input on what they wish the government to introduce tomorrow’s Budget 2017 that will help ease their financial worries.

We polled consumer groups Federation of Malaysian Consumers Associations (Fomca) and the Malaysian Muslim Consumers' Association (PPIM), in addition to Congress of Unions of Employees in the Public and Civil Services (Cuepacs), and housing groups Real Estate and Housing Developers Association Malaysia (Rehda) and National House Buyers Association (HBA).

We also talked to Medical Tweet Malaysia (MedTweetMY) a loose coalition of doctors and public health educators, the Malaysian Medical Association (MMA), youth groups UndiMsia and the University of Malaya Association of New Youth (Umany), and the Malaysian Public Transport Users Association (4PAM).

Here are some of what Malaysians wished for in 2017, divided into five themes:

 

Housing

 

 

 

 

 

 

 

 

For Budget 2017, developers and house buyers alike wanted the government to make more affordable houses available, with Rehda noting that the model of having other house buyers in a private development project shoulder the cross-subsidisation costs of low-cost units was unsustainable.

"Developers should be relieved from the role of providing low cost housing and the role should be reverted back to the Government through one centralised body with a statutory power to build such houses," it said, also asking that the low-cost housing quota for private developers be converted to the higher-priced affordable housing that it said was in greater demand.

As for the HBA, its honorary secretary-general Chang Kim Loong said the ban since Budget 2014 on the Developers' Interest-Bearing Scheme (DIBS) that artificially increases house prices should not be brought back even for first-time buyers, as the prohibition has been effective to stop prices from going up uncontrolled.

Like Rehda which urged utility companies not to impose charges on developers that were bringing them new customers, HBA also highlighted that the high surcharge from such utility companies was bumping up the final property price.

Healthcare

 

 

 

 

 

 

 

 

The 10 per cent (at least RM250 million) cut on the Health Ministry’s budget in January’s Budget 2016 revision caused a public uproar. Groups polled by Malay Mail Online have urged for a reversal to the situation.

“The government must consider the increase of Health Ministry’s operating expenditure, apt with the increasing workload,” said MedTweetMY in an emailed statement.

As analyst Mercer Marsh Benefits predicted that medical cost will rise by 17.3 per cent in the country this year, consumer groups have also called for government intervention into the private healthcare sector.

“Government must also regulate private healthcare sector. I think it's just way beyond affordable now. We need to ensure healthcare is accessible,” said Datuk Paul Selvaraj, secretary-general of Fomca.

Transport

 

 

 

 

 

 

 

 

The government has committed to its big-money projects such as extending the Light Rail Transit tracks and building the multibillion Mass Rapid Transit projects in the Klang Valley amid the budget revision, but 4PAM said more needs to be done, including improvement to security at rail stations.

4PAM president Ajit Johl wants the government to abolish the fare hike on all public transport services and introduce a more “transparent” mechanism by setting up a Public Transport Tariff Review Committee which would include all stakeholders, saying that years of unrevised tariffs is no excuse to bump up charges drastically.

“So before they set a tariff hike, there must be a KPI (key performance indicators), what they plan to achieve before a tariff hike...This is required now, very, very critical at this juncture because the billions that the government has spent on public transport will go to waste if these mechanisms are not put in place,” he said.

“The government should reinstate the incentives for hybrid cars like the Toyotas and Hondas, that are used by the working class for commuting, instead of giving them for the high-cost models like Audis, BMWs, Mercedes and Volvos… all of which are more like the

rich men's tech toys,” said youth group UndiMsia.

Civil service

 

 

 

 

 

 

 

While they have more secure jobs, the 1.2 billion civil servants too have had to tighten their belts all round. Union representatives contacted hoped the government could review their cost of living allowance and standardise it to RM300 across the board as some who live in certain rural areas currently only receive RM150.

“We have not tasted bonus in a while now. If the government is able to, please consider two months annual bonus. We are not asking much,” Cuepacs president Datuk Azih Muda said.

Ever since Budget 2014, civil servants have only been granted half-month pay bonus, while in Budget 2016 they were only given a RM500 “special assistance”.

Education

 

 

 

 

 

 

 

 

Students were arguably the worst-hit demographic group in the January budget revision, after 744 places for overseas students scholarship under the Public Service Department were cut to save about RM240 million, according to Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said.

One of UndiMsia’s members related a situation where some teachers even dug into their own pockets to enhance lessons for their students.

The budget  revision was also said to bite the coffers of local public universities, forcing their managements to scrape for money, which affected the quality of higher education.

“We urge the government to stop slashing budget for education sector, including higher education, and to increase the allocation instead. Allocations for upgrading the facilities in universities and improving the academic and research sector must also be increased,” said Umany president Ho Chi Yang.

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Oct 2016 20

Zeti appointed member of Asian investment bank advisory panel (Malay Mail)

Zeti Aziz, in luminary company on the international advisory panel of the Asian Infrastructure Investment Bank. — Reuters file picKUALA LUMPUR, Oct 19 — Former Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz...

Zeti Aziz, in luminary company on the international advisory panel of the Asian Infrastructure Investment Bank. — Reuters file pic
Zeti Aziz, in luminary company on the international advisory panel of the Asian Infrastructure Investment Bank. — Reuters file pic

KUALA LUMPUR, Oct 19 — Former Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz has been appointed as a member of the Asian Infrastructure Investment Bank (AIIB)’s international advisory panel.

Zeti, ranked the world’s best central bank chief in 2009 by Global Finance magazine, retired in April after 16 years of being at the helm of BNM.

In a statement, AIIB announced that Zeti would join 10 other key personnel on the advisory panel including former Prime Minister of Pakistan Shaukat Aziz, former Finance Minister of Sweden Anders Borg, former Prime Minister of Japan Yukio Hatoyama as well as Secretary-General of the Global Foundation Steve Howard.

Others include Chair Professor of the Korea National Diplomatic Academy and former Deputy Prime Minister and Minister of Strategy and Finance of South Korea, Dr Oh-Seok Hyun, and former Finance Minister of Nigeria and the former Managing Director of the World Bank Dr. Ngozi Okonjo-Iweala.

Former Finance Minister of Timor-Leste Emilia Pires, former US Ambassador, Chairman and Chief Executive Officer of Global Strategic Associates Paul Speltz, Professor at the London School of Economics and former Chief Economist at the World Bank Lord Nicholas Stern and former Chief Executive of Hong Kong SAR Tung Chee-Hwa make the remaining members of the panel.

AIIB said the first meeting of the advisory panel was held in Beijing today.

“The panel provides impartial, objective and independent advice to the President, allowing the bank to benefit from the international experience and expertise of panel members,” it said.

At the meeting, panel members discussed the global economic situation and its implications on the bank’s operations, the need to promote green infrastructure in the new global agenda and the importance of increasing private-sector involvement in the region’s infrastructure.

At the end of the meeting, AIIB President Jin Liqun said: “It is a great honour to convene such an experienced and diverse group of international leaders to advise on the development of the bank’s strategy.

“I have no doubt that the advice the panel provides will help shape the development of the bank in the years ahead.

“And I could not ask for a better group of ambassadors to help promote our new bank to the world.” AIIB, a multilateral international development bank, was set up on December 25, 2015, with an initial capital of US$100 billion (RM419.8 billion), one million shares and an initial paid-up capital of US$20 billion. — Bernama 

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Oct 2016 18

Icahn says a lot of S&P 500 companies 'way overvalued' (The Star)

NEW YORK Billionaire investor Carl Icahn warned on Monday that many S&P 500 companies are "way overvalued," considering soft-to-weakening economic growth in the United States as well as in emerging markets.Reiterating...

NEW YORK Billionaire investor Carl Icahn warned on Monday that many S&P 500 companies are "way overvalued," considering soft-to-weakening economic growth in the United States as well as in emerging markets.

Reiterating his stance on equities, Icahn said on CNBC, "I've been concerned for a few years, and more and more concerned. I think it's very difficult when there (are) so many people in the middle class that really don't have the income that they counted on, pension funds are way underfunded ... in a market, economy that has inflation."

Icahn, chairman of Icahn Enterprises, said he is cautious about the U.S. stock market on a long-term basis, but on the short-term period, it is "anybody's guess."

Icahn said he runs a large portfolio and that there are a few gems in the market.

 

Icahn, chairman of Icahn Enterprises, said he is cautious about the U.S. stock market on a long-term basis, but on the short-term period, it is "anybody's guess."  Icahn said he runs a large portfolio and that there are a few gems in the market..
 

Icahn cited Herbalife Ltd, American International Group Inc and Cheniere Energy Inc as "uniquely undervalued." He added that it takes "years and years and years" to reap huge profits from activism and that serious investors need to be "extremely patient."

About Herbalife, Icahn declined to comment on Bill Ackman, who has been on the opposite side of the bet on the stock, and added that he stood by his major investment.

Herbalife is "undervalued, a good model and gives jobs to a lot of people," Icahn said.

David Tepper, Appaloosa Management president and founder, was on the same CNBC segment and also provided a gloomy backdrop for U.S. equities: "It's a difficult environment. It's an environment (with) OK, not great returns."

Tepper said he is "pretty cautious" on the market and "not outright bearish."

"We're pretty light on the stock market right now. And we have a lot of cash. We're probably more positioned in the bond market right now," he said.

On U.S. presidential candidates Hillary Clinton and Donald Trump, Tepper said: "You have one person with a questionable judgment and the other person that may be demented, narcissistic and a scumbag. I'm not saying which one is which. You can make your own decision on that."

Tepper said, "As far as support, I am sitting on the sidelines. I'll probably vote for one - I'll vote at the end of the day. I'm in Florida, so my vote counts." - Reuters

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Oct 2016 17

Oil speculators most bullish since 2014 after a wild two months (Malay Mail)

Money managers reduced bets on lower WTI prices by more than half in the past three weeks as Opec agreed to its first deal to cut output in eight years. — AFP picNEW YORK, Oct 17 — Oil investors must be getting dizzy.In the...

Money managers reduced bets on lower WTI prices by more than half in the past three weeks as Opec agreed to its first deal to cut output in eight years. — AFP pic

Money managers reduced bets on lower WTI prices by more than half in the past three weeks as Opec agreed to its first deal to cut output in eight years. — AFP pic

NEW YORK, Oct 17 — Oil investors must be getting dizzy.

In the two months since Opec began talking about capping production, speculators’ sentiment has swung wildly, with government and exchange data showing the four biggest weekly position changes ever for the two global benchmark crudes. The latest shift is to optimism, with money managers the most bullish on West Texas Intermediate oil in two years.

“Since the summer we’ve had big moves in net length,” said Mike Wittner, head of oil-market research at Societe Generale SA in New York. “It usually has trended up or down over a couple of months. Now this is happening in a matter of weeks. We’re seeing huge shifts.”

Money managers reduced bets on lower WTI prices by more than half in the past three weeks as Opec agreed to its first deal to cut output in eight years. That drove net length to the highest since July 2014 in the week ended October 11, Commodity Futures Trading Commission data show.

The Organisation of Petroleum Exporting Countries agreed on September 28 in Algiers to trim output to a range of 32.5 million to 33 million barrels a day, which is due to be finalised at the Vienna summit next month. Opec took a step toward coordinated supply curbs with Russia last week and will meet for a “technical exchange” to set a road map for output levels later this month.

The swings in sentiment have tracked the rocky road to US$50 (RM210.55) a barrel oil. Speculators’ combined WTI and Brent crude net position rose or fell more than 100,000 contracts four times in the past two months, the only moves of that size in CFTC and ICE Futures Europe data going back to 2011.

Prices began to rise after Opec’s president said August 8 that the group would hold informal talks in Algiers and Saudi Arabia signaled August 11 it was prepared to discuss taking action to stabilise markets. Futures gave up most of those gains amid doubts that Saudi Arabia and Iran to reach an deal, before the agreement in Algiers sparked the latest rally.

“The change in tone from the Saudis is important,” said Kurt Billick, the founder and chief investment officer of Bocage Capital LLC in San Francisco, which manages about US$432 million in commodities equities and futures. “Getting to a yes in Vienna is challenging. That they are willing to talk about a deal is a big change.”

Money managers’ short position in West Texas Intermediate crude, or bets on falling prices, shrank by 28 per cent to 71,407 futures and options. Longs rose 1.8 per cent to the highest since June 2014. The resulting net-long position increased 13 per cent.

WTI  increased 4.3 per cent to US$50.79 a barrel in the report week, before settling at US$50.35 on October 14.

Other markets

In other markets, net-bullish bets on gasoline rose 19 per cent to 36,650 contracts, the highest since March 2015, as futures slipped 1.1 per cent in the report week. Wagers on higher ultra low sulphur diesel prices climbed 46 per cent to 9,074. Futures rose 2.1 per cent. 

The scale of the internal differences Opec must resolve before securing a deal to cut supply was revealed October 12 as the group’s latest output estimates showed a half-million-barrel difference of opinion over how much two key members are pumping.

“The bottom line is that they’ve made an agreement,” Wittner said. “If you are going short you are betting against the Saudis, which isn’t a good thing historically.” — Bloomberg

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Oct 2016 14

Analyst: Malaysia, Indonesia 2017 palm output to surpass 2015 record (Malay Mail)

 Mistry maintained his global outlook for a strong output recovery of nearly 6.5 million tonnes for the oil-year 2016/17 and calendar year 2017. — Reuters pic          ...


 

Mistry maintained his global outlook for a strong output recovery of nearly 6.5 million tonnes for the oil-year 2016/17 and calendar year 2017. — Reuters picMistry maintained his global outlook for a strong output recovery of nearly 6.5 million tonnes for the oil-year 2016/17 and calendar year 2017. — Reuters pic

 

 

 

 

 

 

 

 

 

 

 

KUALA LUMPUR, Oct 13 — Palm oil output in the world’s top two producers Indonesia and Malaysia will rise next year and likely surpass the 2015 record, as trees recover from a crop-damaging El Nino weather pattern, said leading industry analyst Dorab Mistry today.

The recovery in palm oil output will lead to a “massive rebuilding of stocks” in the oil-year ending Sept. 30, 2017, he also said.

“It is too early to forecast Malaysian and Indonesia production for calendar year 2017 but it is more than likely to exceed the record production of 2015,” Mistry said at an industry conference in Kuala Lumpur.

The expectations of rising stockpiles could weigh on benchmark palm oil prices, which are up nearly 7 per cent this year on tight supplies after yields were impacted by the lingering effects of last year’s El Nino.

Palm oil climbed to a two-week top of RM2,661 a tonne yesterday on forecasts of lower output for this year due to the El Nino. Palm oil was trading just above RM2,620 per tonne this afternoon.

Mistry maintained his global outlook for a strong output recovery of nearly 6.5 million tonnes for the oil-year 2016/17 and calendar year 2017.

However, he adjusted his crude palm oil price target, saying it would drop to 2,200 ringgit by end-December - instead of in November as earlier expected - because of recovering production and rising stocks.

“Most of the additional supply will simply replenish stocks,” said Mistry, who is also the director of Indian consumer goods company Godrej International. “Currently I do not expect stocks to become burdensome.”

Crude palm kernel oil prices are also expected to decline from current levels around US$700 a tonne higher than crude palm oil values, to premiums of US$200-250 on slower demand, he said.

Kernel oil prices reached a five-year top of RM6,200 per tonne in late August, highest since March 2011, on tight supplies, according to assessment prices by Thomson Reuters. — Reuters

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Oct 2016 13

Many companies falling prey to hackers who have turned thieves (The Star)

BY MARTIN CARVALHO PETALING JAYA: On a regular business day in June, boxes of what appeared to be anti­virus software were delivered to two branches of a remittance agency in Kuala Lumpur and Muar.On the box was a...
PETALING JAYA: On a regular business day in June, boxes of what appeared to be anti­virus software were delivered to two branches of a remittance agency in Kuala Lumpur and Muar.

On the box was a note, purportedly from the chief executive officer, telling the supervisors the company was undergoing a security upgrade and asking them to install the disks in every computer in their office.

The branches should have checked if the note and boxes really came from headquarters. They did not. They came from hackers.

And in one weekend, the hackers moved as much as RM6mil from their branches to remitters in Paraguay, China and some parts of Europe.

 

The branches had installed backdoor access for hackers to gain entry into every aspect of their network. For a month, these hackers studied the offices’ process of clearing and moving money.

On a weekend when no one was in the office, they struck.

 

 

By the time the employees came back to work on Monday, they had discovered that their computers had moved out the money.

The money had been cleared out on the in­­ternational side before they even knew they had been hacked, said LE Global Services executive director Fong Choong Fook, whose private cybersecurity firm employs hackers to test the network security of major banks.

More and more Malaysian companies are falling prey to cyberhackers who have turned thieves. It is believed that they took at least RM1bil out of the national economy in 2014, without even having to leave their desktops.

“The victims are not just small companies but large organisations and banks.

“However, you don’t hear about this because they don’t want to report that their servers or computers have been hacked as their image is at stake,” said Fong.

Things are even more dire for small and medium enterprises (SMEs), who are prime targets for hackers because they lack the resources to have cybersecurity measures or rely on third parties to protect their digital spaces.

CyberSecurity Malaysia chief executive officer Dr Amiruddin Wahab said Malaysian SMEs were 33% likely to be victims of cyber attacks, nearly 5% higher than businesses of any other Asean country.

“Unfortunately, most still lack awareness on information security and this often leads to haphazard management of their information and digital assets,” he said.

PwC Consulting Services Associates (M) Sdn Bhd’s senior executive director and forensic lead Alex Tan said he had dealt with three cases here involving losses of between RM700,000 and RM36mil.

“The figures should be higher as there are cases that go unreported due to unwanted embarrassment or because the company was simply unaware it had been hacked,” he said.

Tan said professional service providers such as lawyers, accountants and architects were among targets of such cyber criminals.

He cited an example where a lawyer’s client may get an email from a hacker using the firm’s e-mail requesting payment for service or for purchase of a property.

“The hacker would usually give the excuse that there is a problem with the firm’s bank account and request the unsuspecting client to transfer money to a different account instead,” he said.

Tan advised companies to verify before making online payments to unfamiliar bank accounts.

“One step companies can take is that their board of directors ask for monthly reports on cybersecurity. They should know where their company’s data is located and stored, who has access to it and how it is protected,” Tan added.

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