The oil complex has been driven by supply concerns amid prospects that most significant driver in oil price sentiment.

SINGAPORE: Oil prices edged lower on Monday as a rising rig count in the United States pointed to higher production, but prices held near more than three-year highs and were on track to rise for a second consecutive month.

The oil complex has been driven by supply concerns amid prospects of the United States reimposing sanctions on Iran, while OPEC-led producers continue to withhold supplies.

Brent crude futures, the international benchmark, dipped 34 cents, or 0.5 percent, to $74.30 a barrel in early trading. Prices climbed as high as $75.47 last week, levels not seen since November, 2014.

U.S. West Texas Intermediate (WTI) crude futures were at $67.98 a barrel, down 12 cents, or about 0.2 percent, from their last settlement.

"There's a small drop in trading this morning but volumes are low and there's not much commitment in the selling. The overall trend is positive and there's potential for the market to close higher again today," said Michael McCarthy, chief marketing strategist at CMC Markets.

"The underlying strength in crude markets is quite impressive and a lot of it is predicated by sanctions... Other than that it's the demand picture around the globe, and if that continues we could see higher prices."

U.S. drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest level since March 2015, General Electric's Baker Hughes energy services firm said.

"The increase in rigs is modestly bearish for oil prices because increasing rigs is usually associated with increasing supply," Bill O'Grady, chief market strategist at Confluence Investment Management said in an email.

"However, the increase in rigs was modest and this news is overshadowed by other things, including Angola's production decline, the potential for an end to the Iranian nuke deal, continued threats by Houthis to Saudi oil shipping and infrastructure."

U.S. crude production has soared more than 25 percent since mid-2016 to a record 10.59 million barrels per day (bpd). Only Russia currently produces more, at around 11 million bpd.

Brent prices have gained nearly 6 percent this month, buoyed by expectations the United States will renew sanctions.

U.S. President Donald Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after an agreement over its disputed nuclear programme.

"Precisely what happens with Tehran's nuclear program remains the most significant driver in oil price sentiment," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA.

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Market Update: Singapore stocks log best week in nine months, Malaysian shares rise

Singapore shares posted their best weekly advance since January, helped by a rally in property developers and lenders, while Malaysian equities also rose over the last five days to snap a two-week losing run.

Singapore's FTSE Straits Times index rose 0.9% to 3,291.29 on Friday, taking its rally this week to 2.2%. UOL Group added 5.3% since last Friday, pacing gains for real estate developers. DBS Group Holdings led banking stocks higher, climbing 3.2% this week. On Friday, UOL Group was up 4.3% and DBS by 0.8%.

Property Singapore stocks in the city-state gained this week after City Developments bought a residential site worth more than S$900 million ($660 million), reigniting optimism for Singapore's real estate market, according to at least two brokerages. Shares of City Developments rose 2.3% this week.

Lenders climbed for a third consecutive week, tracking a rise in U.S. bond yields amid optimism over tax reforms in the world's largest economy. Singapore rates are heavily influenced by the U.S. and a rising interest rate scenario helps the net interest rate margin outlook for banks. The benchmark 10-year U.S. bond yield is trading near a four-month high.

Gains in Singapore stocks this week were also helped by a record run on Wall Street that saw all three major U.S. equity benchmarks repeatedly scale record highs.

The FTSE Bursa Malaysia KLCI ended up 0.3% to 1,764 on Friday, rising 0.5% this week. AMMB Holdings and RHB Bank were the week's top performers, adding at least 2.4% each, rebounding from last week's losses. On Friday, AMMB rose 0.2% and RHB ended little changed.

The market is expected to trade sideways in the coming week as investors await fresh catalysts which include Malaysia's upcoming 2018 fiscal budget, said Pong Teng Siew, head of research at Inter-Pacific Securities in Kuala Lumpur. "It looks like it's going to be a very quiet week ahead," with funds seen holding back positioning ahead of the budget announcement expected in the final week of this month, said Pong. His forecast model indicates a "very narrow" 14-point upside and downside for the KLCI for the whole week.

Foreign outflows from Malaysia's stock market dwindled to 29 million ringgit ($6.8 million) this week through Thursday, after last week's outflow of nearly 1 billion ringgit.

Construction and property developer WCT Holdings advanced 2.3% on Friday after is subsidiary won a contract for completion of Light Rail Transit Line 3 (LRT3) and other associated works for 640 million ringgit.

Gabungan AQRS climbed 6.4% after securing LRT3 contract worth 1.21 billion ringgit.

 

Source - nikkei.com

Definite Trading Range Topple For Malaysia Stock Market

Definite Trading Range Topple For Malaysia Stock Market

The Malaysia securities exchange has moved higher in consecutive sessions, in spite of the fact that it has included only a modest bunch of focuses or 0.3 percent along the way. The Kuala Lumpur Composite Index moved simply over the 1,630-point level, and the business sector is taking a gander at another genuinely level lead for Friday.

The worldwide estimate for the Asian markets is level to higher, with alert liable to rule in front of U.S. work information later today - while a decrease in the cost of unrefined petroleum likewise might be an element. The European and U.S. markets were blended yet minimal changed and the Asian markets figure to take after that lead.

The KLCI completed marginally higher on Thursday taking after increases from the money related shares, manor stocks and mechanical issues.

Among the actives, Sime Darby, Maybank, Tenaga Nasional, Public Bank and AirAsia all completed higher, while MISC and Petronas Chemicals finished lower.

The lead from Wall Street is carefully hopeful as stocks moved higher on Thursday, disregarding a lower open.

The Dow rose 48.89 focuses or 0.3 percent to 17,838.56, while the NASDAQ progressed 19.11 focuses or 0.4 percent to 4,971.36 and the S&P 500 climbed 5.93 focuses or 0.3 percent to 2,105.26.

The recuperation by the business sectors likewise came as merchants looked ahead to the arrival of the nearly observed month to month employments report later today. The information could significantly affect the standpoint for whether the Federal Reserve raises financing costs in the not so distant future.

A decline by the cost of unrefined petroleum weighed on the business sectors ahead of schedule in the session after an OPEC meeting neglected to bring about a concurrence on another yield target.

Nearer to home, Malaysia will discharge April figures for imports, fares and exchange adjust later today.

Fares are relied upon to include 2.0 percent year in the wake of increasing 0.2 percent in March. Imports are called level in the wake of dunking 5.5 percent in the earlier month. The exchange surplus is pegged at 8.62 billion ringgit, down from 11.19 billion a month prior.

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Malaysia Stock Market Momentum -Velocity or Speed

http://www.mmfsolutions.sg/malaysian-intraday-stock-picks-klse/

Market Update

- Velocity in the Malaysia equity market has fallen from around the 40% level early this year to as low as 19% on 6 Jul and is currently trending around the median of 29%.Velocity is a function of trading value vs.. market value – we note that average trading value (for Jun-Jul) has fallen 16.0% since end-2010 but we note that market value has risen  by around 4.7% over the same period (even after stripping out new listings). This suggests that the market has not hit a roadblock and that investors are not in a hurry to sell. 

 
- Looking at the sectors’ YTD performance, timber (including all four plywood plays) and media stocks were strong outperformers, despite negative returns in the  last two months. More consistent outperformers for the YTD and last two months were telecom and  banks, while utilities and technology consistently underperformed. We believe this trend may continue for a few more months but technology stocks could see a turning point in the 4Q as inventory is depleted and sales begin to pick up. 

 
- We counted five oil & gas stocks among the top 20 YTD outperformers, but this was balanced by price declines for KNM and Perdana Petroleum. Nevertheless we expect offshore activity to continue picking up, which will likely lead to improved performance for vessel and downstream plays over the next 6-12 months. 

 
- We anticipate there may be earnings disappointments for some sectors this quarter, including motor (supply chain disruption), technology (weak demand/supply chain disruption) and education (delays in student enrolment), but the reasons are already known. 

 
- We also see investors weighing the risks of: 1) M&A deals that are pending completion, concessions that need to be renewed, and ETP projects that are pending execution and this will continue to affect related stocks. In our view, the risk/reward equation has not changed. 

 
- As we move forward, we expect sceptics to disappear, thereby lifting the market. Nevertheless, to bridge the gap in investor confidence in  the near term, we believe alpha+ stocks offer a measure of comfort in terms of estimated returns from capital upside and dividend yield.

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#DBS emerges as #DeutscheBank’s only ‘buy’ in challenging bank sector

MALAYSIA/SINGAPORE (July 25): Despite signs of improved lending and expectations of stable 2Q16 results among Singapore’s bank sector, Deutsche Bank says challenges could be plentiful if low interest rates persist in 2H16.

Hence, a lack of strong re-rating catalysts makes DBS its only “buy” rated bank at a target price of S$19.80, for its “undemanding valuation and better risk/reward dynamics”.

OCBC and United Overseas Bank (UOB) have been rated at “hold” with target prices of S$9.50 and S$20.00 respectively.



In a Friday report, analysts Franco Lam and Sukrit Khatri say they expect the general sector’s earnings to be flat q-o-q, after a seasonally stronger 1Q.

Overall, they forecast that key trends will include flat-to-down net interest margin (NIM) with loan demand remaining soft; continued flat fee income q-o-q; stable cost-to-income ratio; as well as resilient asset quality and stable credit costs due to limited commodity-related concerns in the quarter.

Lam and Khatri have also predicted the following for Singapore’s banks:

DBS 2Q16 net earnings — around S$1,100 million (-6% q-o-q, -2% y-o-y)

Look out for: Progress in DBS’s partnership with Manulife, asset quality trends including those in China, as well as the oil and gas (O&G), property and SME sectors.

Due to recovery in loan demand in the quarter, the analysts expect DBS NIM to have held in 2Q16. The drop in interbank rates after 1Q16 will only be felt by 2H16, they add, as the bank’s sensitivity to domestic interest rates would likely to have lagged behind domestic peers. Strength in fee income is expected to continue, while growth rate and trading income could have been weaker in the quarter. Also, bad debt provisions are projected to be sequentially higher q-o-q, partially due to RMB depreciation.

OCBC 2Q16 net earnings — around S$870 million (+2% q-o-q, -8% y-o-y)

Still-weak loan demand and lower interbank rates may have led to slightly lower q-o-q margin, with the non-interest income line experiencing continued volatility due to GE contribution. Other fees, especially wealth-management related ones, would have remained under pressure, say the analysts. “Asset quality issues in MY and IDK, and SME book, O&G and the commodity sectors need to be watched,” they add.

UOB 2Q16 net earnings — around S$805 million (+5% q-o-q, +6% y-o-y)

More margin pressure is expected as Deutsche observes that UOB is faster in re-pricing earning assets on changes to interest rates. NIM is projected to have fallen 5bps q-o-q. The analysts expect a better recovery for UOB in 2Q in terms of fees and trading income, after a soft 1Q16 fee income. “Commodity sectors continue to require an intense watch, as they are vulnerable to (UOB’s) asset quality,” add Lam and Khatri, who foresee that credit cost has remained close to the guidance of annualised 32 bps for the year.

As at 11:05 a.m., shares of DBS were trading 0.12% lower at S$16.27; OCBC was down 1% at S$8.89; and UOB was down 0.26% at S$19.

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IEA says oil costs may have bottomed out

Oil costs may have bottomed as yield in the United States and other non-OPEC makers is starting to fall rapidly and an expansion in supply from Iran has been not exactly sensational, the International Energy Agency said on Friday.

The IEA, which arranges vitality approaches of industrialized countries, said it now accepted non-OPEC yield would fall by 750,000 barrels for every day (bpd) in 2016 contrasted with its past appraisal of 600,000 bpd.

U.S. creation alone would decrease by 530,000 bpd in 2016, it said.

"There are clear signs that market powers ... are working their enchantment and higher-cost makers are cutting yield," the Paris-based IEA said.

It said yield from the Organization of the Petroleum Exporting Countries fell by 90,000 bpd in February because of generation blackouts in Nigeria, Iraq and the United Arab Emirates.

"In the interim, Iran's arrival to the business sector has been less emotional than the Iranians said it would be; in February we trust that generation expanded by 220,000 bpd and, temporarily, it gives the idea that Iran's arrival will be progressive," the IEA said.

It said that as an aftereffect of these variables, inventories in industrialized part nations of the Organization for Economic Cooperation and Development (OECD) had declined without precedent for a year albeit rough in skimming stockpiling expanded.

The IEA said it in any case saw worldwide oil and item stocks rising intensely in the main portion of 2016 in the range of 1.5-1.9 million bpd yet easing back to only 0.2 million bpd in the second half, versus appraisals of a work of 0.3 million bpd in its past report.

"At costs there might be light toward the end of what has been a long, dull passage, yet we can't be accurately certain when in 2017 the oil business sector will accomplish the highly craved equalization. It is clear that the present heading of travel is the right one, in spite of the fact that with far to go," the IEA said.

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Oil costs fall as oversupply stresses return

Oil fell in Asia on Thursday, finishing a brief rally fed by news US fuel inventories fell after OPEC kingpin Saudi Arabia shot down trusts in a yield cut.

Costs climbed the earlier day as brokers looked past an expansion in US business unrefined inventories to a record high to a fall in supplies of refined items such as fuel.

Be that as it may, stresses over overflowing supplies immediately came back to the fore as trusts the world's top makers had wrapped everything up to confine their yield were quickly dashed.

"OPEC is not going to have the capacity to do anything, that is the truth of it," said Michael McCarthy, boss business sector strategist at CMC Markets Australia.

"It has no ability to facilitate the activities of its individuals so any oil bulls that are depending on OPEC to get together will be extremely frustrated."

At around 0415 GMT, the US benchmark West Texas Intermediate (WTI) for conveyance in April fell 24 pennies, or 0.75 percent, to $31.91. Worldwide benchmark Brent for April facilitated 32 pennies, or 0.93 percent, to $34.09 a barrel.

Rough bounced after significant makers Saudi Arabia and Russia proposed to stop yield in the event that others went with the same pattern, quickly dragging costs from the doldrums after they hit 13-year lows this month.

Oil costs have fallen somewhere in the range of 70 percent from a mid-2014 high over worries of an enduring overflow of supplies, during an era when development in top buyers such as China is abating.

Trusts the Organization of the Petroleum Exporting Countries may trim generation were dashed on Tuesday when Saudi Oil Minister Ali al-Naimi said individuals were rather wanting to stop yield at January's abnormal states.

Key maker and OPEC part Iran, which is inclining up creation after atomic connected Western financial approvals were lifted, has additionally responded coldly to the stop proposition.

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