The Star Online: Business
The Star Online: Business |
- FBM KLCI lower
- US stocks inch higher, shaking off 4 weeks of losses(update)
- Oil price down, getting Libyan oil to market could take years
| Posted: 22 Aug 2011 07:26 PM PDT KUALA LUMPUR: Investors remained cautious on Tuesday despite Asian markets opening higher on speculation of another round of quantitative easing in the US, an improvement in a gauge of US industrial production data and Wall Street edging higher at close. Gold prices reflected investor sentiments with the metal rising to another all-time high at US$1,913.50 an ounce at 9.29am before retreating to US$1,897.10. At 10am, the local bourse's benchmark FBM KLCI was a tenth of a percent lower at 1,470.60 while Singapore's Straits Times Index dropped two-thirds of a percent to 2,713.25. Tokyo's Nikkei 225 was up a tenth of a percent to 8,636.78 at the midday break, Hong Kong's Hang Seng Index shed 0.30% to 19,427.88, Shanghai's A share index gained 0.17% to 2,520.25 and Seoul's Kospi Index advanced 1.68% to 1,739.51. At Bursa Malaysia, trading was thin with 138.76 million shares done with at a turnover of RM218.86 million. Losers outpaced gainers 200 to 153 while 192 other counters were traded unchanged. Sunway, the newly merged entity that took over the listings of SunCity and Sunway Holdings, fell 26 sen to RM2.54. Among industrial stocks, Tasek was down 9 sen to RM7.70, Innorprise shed 12 sen to RM1.17 and Metech tumbled 16.5 sen to 31.5 sen. Supermax was 9 sen lower at RM3.02, Tradewinds lost 7 sen to RM9.08 and Amway was down 9 sen to RM8.93. Nymex crude oil in electronic trade was up 16 cents to US$84.58 per barrel. The ringgit was quoted at 2.974 to the greenback and 4.275 to the euro. |
| US stocks inch higher, shaking off 4 weeks of losses(update) Posted: 22 Aug 2011 06:45 PM PDT NEW YORK: It was another day of big swings in the Dow Jones industrial average, but at least Monday ended with a modest gain. The Dow soared 200 points in the morning, an encouraging start after four weeks of losses. By noon that gain shriveled to just 2 points, then came a rise of another 100 in the afternoon. At the end of the day, the Dow closed up 37 points. Compared with the even wilder fluctuations over the past two weeks, Monday's trading looked relatively calm. The Dow has gained or lost at least 200 points eight days in August, including a 419-point plunge last Thursday. A downgrade of the U.S. credit rating and fears of a new recession have shaken investors, leaving the Dow down 10 percent this month. Hewlett-Packard Co. rose 3.6 percent, the most of the 30 large companies in the Dow Jones industrial average. H-P sank 20 percent on Friday after saying it planned to sell its PC business and stop selling other products. Bank stocks, which have been clobbered over worries about Europe's debt crisis, took another fall. JPMorgan Chase & Co. dropped 2.7 percent. Bank of America lost 7.9 percent, the biggest drop among the 30 Dow companies. Analysts at Wells Fargo cut their price target on the stock, citing fears that the U.S. could slip back into a recession. Sam Stovall, chief investment strategist at Standard & Poor's equity research, cautioned against reading too much into the market's early jump Monday. "A two-hour rally isn't enough to change the trend," Stovall said. "It's natural in a declining market to have some days that run counter to the overall trend." The S&P 500 index has lost 13 percent this month, putting the broad market measure on course for its worst August since 1998. After falling four weeks in a row, some stocks are appearing too cheap for investors to pass up, Stovall said. Investors are still worried that the U.S. may fall into another recession. Some hope the Federal Reserve may announce some kind of action to help the economy when it holds its annual retreat in Jackson Hole, Wyo., on Friday. It was at the same conference a year ago that Fed Chairman Ben Bernanke hinted that the central bank would buy Treasury bonds to push interest rates lower. The Dow rose 37 points, or 0.3 percent, to close at 10,854.65. The S&P 500 rose 0.29 points, or less than 0.1 percent, to 1,123.82. It had been up as many as 22 points. The Nasdaq rose 3.54 points, or 0.2 percent, to 2,345.38. Stocks have fallen for four weeks on signs that the U.S. economy is slowing. The sharpest drops came Thursday with news of weaker manufacturing in the mid-Atlantic states and an increase in the number of people who applied for unemployment benefits. The Chicago Board of Options Exchange's volatility index has soared 68 percent this month. That's a sign investors are anticipating more wide swings in the S&P 500, the index most professional investors use. The index fell 1.4 percent Monday. Treasury bond prices and gold have been rising this month as investors seek refuge from the turmoil in stocks. The yield on the 10-year Treasury note dipped below 2 percent last week, a record low. The yield ended the trading day at 2.10 percent Monday. Yields on bonds fall when demand for them increases. Gold rose 2 percent to $1,892. Gold has gained 16 percent so far in August. Three stocks fell for every two that rose on the New York Stock Exchange. Trading volume was above average at 4.8 billion. Six of the 10 industry groups in the S&P 500 rose. Telecom stocks rose less than 1 percent, the most of any industry in the index. Boeing Co. rose 1.5 percent after Britain's Royal Air Force said it would buy 14 Chinook helicopters for $1.6 billion. Lowe's Cos. rose 1.1 percent. The home improvement retailer said it will buy back up to $5 billion stock over the next two to three years. Last week, Lowe's lowered its sales forecast for the second half of the year as shoppers grow more worried about the economy. No major economic reports came out Monday. Later in the week, traders will be sorting through figures on new home sales, chain store sales, durable goods orders and weekly claims for unemployment benefits to see if another recession could be on the way. The government will also release revised figures for second-quarter economic growth Friday. Another significant revision downward could alarm investors. Stocks in Europe remained volatile Monday as investors gyrated between fears of a double-dip recession and hopes that the Federal Reserve will soon take action to revitalize the U.S. economy. After rallying earlier in the day, European stocks erased much of their gains in late trading. Britain's FTSE 100 closed 1 percent higher at 5,092.8, after having risen above 2 percent. France's CAC 40 gained 1.1 percent to 3,051.3. But Germany's DAX declined 0.1 percent to 5,473.7. The indecisive mood in Europe and the U.S. followed a jittery day of trading in Asia, where most markets closed in the red. The recent rise in the yen contributed to losses in Asia, where most markets ended the day in negative territory. Japan's Nikkei 225 index lost 1 percent to close at 8,628.13 - a five-month low - as the strong yen hurts the country's exports by making them more expensive. Japan intervened in currency markets earlier this month to try to reverse the yen's climb. The decision to sell the yen and buy the dollar worked initially, sending the greenback toward 80 yen. But the dollar has been weighed down by the dimming outlook for the U.S. economy and is back down to mid 76-yen levels. South Korea's Kospi also took a hit, dropping 2 percent to 1,710.70. The Shanghai Composite Index lost 0.7 percent to 2,515.86 while the Shenzhen Composite Index lost 0.9 percent to 1,124.17. Hong Kong's Hang Seng, meanwhile, swung into positive territory to eke out a 0.5 percent gain at 19,486.87. On Tuesday morning Japan, Australia and New Zealand markets have followed jittery European and Wall Street leads by opening with modest gains. New Zealand's benchmark NZX 50 index edged up 8 points, or a fraction of 1 percent, in early trading to 3,282. Australia's S&P/ASX200 index added 20 points, or half a percent, to 4,102 points in early trade. Japan's Nikkei 225 rebounded from a five-month low on Monday to open Tuesday with a 34 point gain - less than half a percent - at 8,664. In Kuala Lumpur Bernama reported that share prices on Bursa Malaysia opened firmer on bargain hunting Tuesday with heavyweights such as Maybank which posted record profit Monday helping to lift the market. In thin trade, the FBM KLCI increased 2.41 points to 1,474.57 after 15 minutes of trading. It opened 2.2 points higher at 1,474.36. "Against the sluggish broad market backdrop, investors are expected to react to individual corporate developments," HwangDBS Vickers Research said.After rising as much as 1.9 to 2.4 per cent initially, major US equity indices lost steam subsequently to finish between flat and marginally up last night. Bursa Malaysia's Finance Index jumped 8.91 points to 14,031.37, the Plantation Index rose 22.29 points to 7,185.08 and the Industrial Index climbed 1.97 points to 2,735.94. The FBM Emas Index appreciated 17.11 points to 10,091.08, the FBM70 Index was up 19.03 points to 11,019.84 and the FBM Ace added 4.93 points to 3,788.97. Advancers led decliners by 153 to 50 while 95 counters were unchanged and 1,185 counters were not traded. A total of 47.858 million shares worth RM50.625 million were traded. Sunway which was re-quoted following the merger exercise between Sunway Holdings and Sunway City slipped 15 sen to RM2.65. Among active stocks, Malayan United was flat at 20 sen, Astral Supreme inched up one sen and Perdana Petroleum perked up three sen to 75.5 sen. Among heavyweights, Maybank added five sen to RM8.69, CIMB slipped two sen to RM7.75 while Sime Darby and Petronas Chemicals inched up two sen each to RM8.83 and RM6.26 respectively.Tenaga Nasional edged down two sen to RM5.47 - AP/Bernama |
| Oil price down, getting Libyan oil to market could take years Posted: 22 Aug 2011 06:16 PM PDT NEW YORK: It could be a year or more before Libya produces enough oil to start exporting it in large amounts again. International oil prices fell Monday because of the prospect that those shipments will hit the market again. The shipments stopped six months ago as the rebellion in Libya raged. The conflict damaged pipelines and fields and forced out foreign oil engineers who once helped the nation export 1.5 million barrels of oil every day. Before the country can begin producing oil in large amounts again, security must be re-established, a new government must be formed, the United Nations must lift international sanctions, and damage to oil fields and pipelines must be repaired. The price of crude oil was already falling sharply because of concerns that the slowing global economy will slow demand from drivers and businesses. The ouster of Libyan leader Moammar Gadhafi would clear the way for a new government and a return to oil production. But bringing Libyan oil production back to levels that will make a difference will take months if not years, experts say. "This isn't going to lead to an overnight restart of Libyan oil exports," says Jim Burkhard, managing director for global oil at IHS CERA, an industry research group. In the meantime, Burkhard says, the world's teetering economy will drive prices. Since February, the loss of Libyan oil had driven up the price of Brent crude, which is traded in London. Brent crude is used to price much of the oil produced and sold abroad and sold to refineries on the U.S. East Coast. On Monday, Brent crude fell 26 cents to $108.36 per barrel. It fell much further earlier in the day but rose as it became clear that it would take months for Libya to have an impact. The price of U.S. benchmark oil, known as West Texas Intermediate, rose $2.01 to $84.42. Traders who play the international oil markets, anticipating that the price of Brent crude would keep falling, wanted more U.S. oil. Libya sits on the largest oil reserves in Africa. Before the uprising, it was the world's 12th-largest exporter, mostly to Europe. Libyan exports were all but shut off in February as the unrest intensified and international oil companies evacuated workers. Shokri Ghanem, the former chairman of Libya's National Oil Company, said Libya could start producing oil within three to four months, according to Platts, an energy information service. Ghanem said it could take two years to restore production to pre-uprising levels. "There is some damage to installations, and there is a problem with some wells that were not closed properly," Ghanem told Platts. Eni, the largest foreign oil producer in Libya, is not so optimistic. While it has sent some technicians back to the country to restart oil and natural gas operations, a company spokesman said restarting crude production could take a year or more. Helima Croft, an analyst with Barclays Capital, compares Libya's political situation to that of Iraq in 2003, after Saddam Hussein was toppled by American-led forces. "Everyone thought that Iraq would be stable overnight, but instead we had an insurgency," Croft says. "The oil was offline for years." Judith Dwarkin, chief energy economist at ITG Investment Research, expects Libya to return to full production slowly over two years. In the meantime, she expects the price of West Texas crude to stay between $80 and $90 a barrel, barring an unforeseen supply disruption or a global economic collapse. Besides worries about the world economy, oil prices have fallen recently because Saudi Arabia has produced more oil and developed countries have released oil from strategic reserves to make up for the loss of Libyan crude. In other Nymex trading for September contracts, heating oil lost less than a penny to $2.8954 per gallon and gasoline futures dropped 3.67 cents to $2.8045 per gallon. Natural gas fell 4.9 cents to $3.891 per 1,000 cubic feet. ____ |
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