Wednesday, July 23, 2008
2:34 pm - FCPO had a huge selldown today before lunch !
Some of our clients shorted already taken profit before lunch. The FCPO selldown so fast !
11:54 am - FKLI has broken last high @ 1121
It look like it is going to go higher, there is volume in the trade. Can go LONG !
10:16 am - DJIA is finally reversed its downtrend
If you look back to its several days ago volume, there are significant volume in play. However, the DJIA may pause first before resuming its uptrend - meaning DJIA may lose some of its ground tonite.
10:11 am - M'sia inflation comment by Ang Kok Heng
RACING WITH INFLATION
Dear Investors,
For this month's Smart Money, our topic of discussion is 'Racing with Inflation'.
Malaysia inflation soared to 3.8% in May from 3.0% in April compared to prices a year ago. The situation should deteriorate further over the next few months after the 41% fuel prices hike in early June. Suddenly, all the price increases seem to come concurrently and they are the essential items such as our staple food; rice, steel for the construction industry and now petrol for passenger cars and diesel for the transport industry. After the cut in gas subsidy, electricity tariff has just joined in the race in July.
To counter the higher urban inflation and prevent further erosion of the savings there is an urgent need for urban folks to learn how to invest the passive savings so as to achieve higher returns. Keeping too much money in the banks will only lead to diminishing value of money which will value less upon retirement in real term. When coming to investment, average Malaysian will relate that to taking higher risk which may also mean losing more money instead.
It is true that there are risks in most investment. However, the risk can be mitigated by having a thorough understanding of the investment such as how it works and where the profit comes from. Investors need to spend some time to learn more about any investment products be it properties, stock and shares, unit trusts, structured products, dual currency or equity-linked notes. Talking to experienced professionals who understand the investment will help.
To achieve higher return and to race ahead of inflation, city folks may have to work harder to ensure the return of savings is higher than urban-inflation rate. Taking cognisant of that, investment will ensure that our passive money works harder for us. As inflation does not wait for us, the earlier we start to wake up from the laurels and let our passive investments work harder, the earlier we can catch up inflation. The first move is to open our mind to learn more about other investment products.
A thorough understanding of an investment product is needed before we start investing.
Ang Kok Heng ,CFA
Chief Investment Officer
Email: kokhenga@poems.com.my
Dear Investors,
For this month's Smart Money, our topic of discussion is 'Racing with Inflation'.
Malaysia inflation soared to 3.8% in May from 3.0% in April compared to prices a year ago. The situation should deteriorate further over the next few months after the 41% fuel prices hike in early June. Suddenly, all the price increases seem to come concurrently and they are the essential items such as our staple food; rice, steel for the construction industry and now petrol for passenger cars and diesel for the transport industry. After the cut in gas subsidy, electricity tariff has just joined in the race in July.
To counter the higher urban inflation and prevent further erosion of the savings there is an urgent need for urban folks to learn how to invest the passive savings so as to achieve higher returns. Keeping too much money in the banks will only lead to diminishing value of money which will value less upon retirement in real term. When coming to investment, average Malaysian will relate that to taking higher risk which may also mean losing more money instead.
It is true that there are risks in most investment. However, the risk can be mitigated by having a thorough understanding of the investment such as how it works and where the profit comes from. Investors need to spend some time to learn more about any investment products be it properties, stock and shares, unit trusts, structured products, dual currency or equity-linked notes. Talking to experienced professionals who understand the investment will help.
To achieve higher return and to race ahead of inflation, city folks may have to work harder to ensure the return of savings is higher than urban-inflation rate. Taking cognisant of that, investment will ensure that our passive money works harder for us. As inflation does not wait for us, the earlier we start to wake up from the laurels and let our passive investments work harder, the earlier we can catch up inflation. The first move is to open our mind to learn more about other investment products.
A thorough understanding of an investment product is needed before we start investing.
Ang Kok Heng ,CFA
Chief Investment Officer
Email: kokhenga@poems.com.my
9:54 am - FKLI gap up strongly with overnite gains from DJIA
Cash market is up too with huge gain so early in the morning !
Tuesday, July 22, 2008
9:33 am - FKLI need to break above 1105 to go LONG
As the market is weak, buy on the dip after the break !
9:16 am - DJIA is showing another no demand
As the market progress higher, volume drop - No demand until you see a reversal maybe tonite !
Monday, July 21, 2008
2:48 pm - FKLI is reversing from today low !
Mkt is very volatile today ! I really finding difficult to read the market now ! Cash going negative but FKLI very bullish !
11:10 am - FKLI at this moment is rangebound
Despite selldown by cash market, FKLI remain in the premium.
9:52 am - FKLI projection low @ 1010 for next few months
Projection low for FKLI @ 161.8% is at 1010 if FKLI does trend further down !
8:58 am - DJIA maybe face No Demand tonite !
High volume but small body for last Friday DJIA closing.
8:53 am - FKLI move up in tandem with DJIA higher closing !
FKLI will grativate to daily pivot 1103.
Saturday, July 19, 2008
7:57 am - Oil prices tumble in biggest weekly drop ever
This in turn will affect our palm oil prices.
NEW YORK (AP) - The price of oil recorded itsbiggest weekly drop ever, and a gallon of gas finally pulled back from itsrecord high. So is it time to declare the energy bubble popped? Experts won't go that far just yet. "It's too early to say we've seen the worst of it," said Tom Kloza,publisher and chief oil analyst of the Oil Price Information Service in Wall,N.J. "We would be Pollyannish if we believe one week represents a trend." Still, with oil recording yet another drop on Friday, some industry expertswho just days ago thought there was more juice left in oil's meteoric run arereconsidering. "If this is not the bubble's implosion, than it's a reasonable facsimile,"analyst and trader Stephen Schork said in his daily market commentary. "Timewill tell. Nevertheless, for the time being we no longer care to hold a bullishview." Light, sweet crude for August delivery fell 41 cents Friday to settle at$128.88 on the New York Mercantile Exchange -- well below its trading record ofmore than $147 a week earlier. The average price of a gallon of regular gas fell about a penny for the day,to $4.105, according to auto club AAA, the Oil Price Information Service andWright Express. Diesel prices dipped three-tenths of a cent to $4.842 a gallon. Some analysts said a nationwide average of $4 or even lower could be in theoffing -- almost unthinkable in a summer when there has seemed to be no reliefat the pump -- although they cautioned that there is no guarantee prices willstay low. "We're going to see some relief from that relentless march higher," Klozasaid. Gas may be getting just a bit cheaper, but major changes in how Americanslive and drive are already in motion. Car buyers have been fleeing to more fuel-efficient models. U.S. sales ofpickups and sport utility vehicles are down nearly 18 percent this year throughJune, while sales of small cars are up more than 10 percent. While slashing production of more-profitable trucks and SUVs, automakershave been scurrying to build their most fuel-efficient models faster. Toyota Motor Corp., which hasn't been able to keep up with demand for its46-miles-per-gallon Prius hybrid, said last week it will start producing thePrius in the U.S. and suspend truck and SUV production to meet changing consumerdemands. Ford Motor Co. and General Motors Corp. also have announced plans toincrease small car production, and GM has said 18 of the 19 vehicles it islaunching between now and 2010 are cars or crossovers. Some brave traders used the week's pullback in oil prices as a chance to buybarrels that suddenly seemed to be on sale. But oil analysts were advisinginvestors to beware. "Buying here is an opportunity if you are a deep believer in $200 (abarrel), otherwise we think that caution would be better applied," analystOlivier Jakob of Petromatrix in Switzerland said in a research note. If oil buyers sense that the slide was overdone, you'll probably notice atthe pump quickly. "If (oil prices) rebound, you're going to see a quick reaction at the gasstation, because their profit margins are so stretched," AAA spokesman GeoffSundstrom said. "They may be very fast bringing prices back up." In other Nymex trade, heating oil futures fell 5.23 cents to settle at$3.6915 a gallon while gasoline futures edged up 0.73 cent to $3.1709 a gallon.Natural gas futures rose 3.3 cents to $10.57 per 1,000 cubic feet. In London, Brent crude futures for September delivery rose 88 cents tosettle at $130.19 on the ICE Futures Exchange. Copyright 2008 Associated Press. All rights reserved. This material may not be
NEW YORK (AP) - The price of oil recorded itsbiggest weekly drop ever, and a gallon of gas finally pulled back from itsrecord high. So is it time to declare the energy bubble popped? Experts won't go that far just yet. "It's too early to say we've seen the worst of it," said Tom Kloza,publisher and chief oil analyst of the Oil Price Information Service in Wall,N.J. "We would be Pollyannish if we believe one week represents a trend." Still, with oil recording yet another drop on Friday, some industry expertswho just days ago thought there was more juice left in oil's meteoric run arereconsidering. "If this is not the bubble's implosion, than it's a reasonable facsimile,"analyst and trader Stephen Schork said in his daily market commentary. "Timewill tell. Nevertheless, for the time being we no longer care to hold a bullishview." Light, sweet crude for August delivery fell 41 cents Friday to settle at$128.88 on the New York Mercantile Exchange -- well below its trading record ofmore than $147 a week earlier. The average price of a gallon of regular gas fell about a penny for the day,to $4.105, according to auto club AAA, the Oil Price Information Service andWright Express. Diesel prices dipped three-tenths of a cent to $4.842 a gallon. Some analysts said a nationwide average of $4 or even lower could be in theoffing -- almost unthinkable in a summer when there has seemed to be no reliefat the pump -- although they cautioned that there is no guarantee prices willstay low. "We're going to see some relief from that relentless march higher," Klozasaid. Gas may be getting just a bit cheaper, but major changes in how Americanslive and drive are already in motion. Car buyers have been fleeing to more fuel-efficient models. U.S. sales ofpickups and sport utility vehicles are down nearly 18 percent this year throughJune, while sales of small cars are up more than 10 percent. While slashing production of more-profitable trucks and SUVs, automakershave been scurrying to build their most fuel-efficient models faster. Toyota Motor Corp., which hasn't been able to keep up with demand for its46-miles-per-gallon Prius hybrid, said last week it will start producing thePrius in the U.S. and suspend truck and SUV production to meet changing consumerdemands. Ford Motor Co. and General Motors Corp. also have announced plans toincrease small car production, and GM has said 18 of the 19 vehicles it islaunching between now and 2010 are cars or crossovers. Some brave traders used the week's pullback in oil prices as a chance to buybarrels that suddenly seemed to be on sale. But oil analysts were advisinginvestors to beware. "Buying here is an opportunity if you are a deep believer in $200 (abarrel), otherwise we think that caution would be better applied," analystOlivier Jakob of Petromatrix in Switzerland said in a research note. If oil buyers sense that the slide was overdone, you'll probably notice atthe pump quickly. "If (oil prices) rebound, you're going to see a quick reaction at the gasstation, because their profit margins are so stretched," AAA spokesman GeoffSundstrom said. "They may be very fast bringing prices back up." In other Nymex trade, heating oil futures fell 5.23 cents to settle at$3.6915 a gallon while gasoline futures edged up 0.73 cent to $3.1709 a gallon.Natural gas futures rose 3.3 cents to $10.57 per 1,000 cubic feet. In London, Brent crude futures for September delivery rose 88 cents tosettle at $130.19 on the ICE Futures Exchange. Copyright 2008 Associated Press. All rights reserved. This material may not be
Friday, July 18, 2008
5:22 pm - FKLI has a wide range bar !
For the downtrend to persist ! FKLI need a follow thru & selldown on Mon.
12:33 pm - FKLI selldown and trying to build a double bottom at 1094/1095
Sell into strength and buy into weakness !
8:59 am - FKLI daily chart is either forming ???
The formation that FKLI is doing in coming days - is either a head and shoulder (bearish) or double bottom (bullish) with a breakout very soon !
Notice if FKLI break above the trading channel, FKLI can test back 1146.
Thursday, July 17, 2008
5:01 pm - FKLI is going a rangebound situation
Trading is ranging. So buy at support and sell at resistance is the strategy for tomorrow.
9:35 am - FKLI has no follow thru on the downtrend.
We had 3 consecutive down bar and FKLI will take a breathe first i.e. it may reverse.
Wednesday, July 16, 2008
5:23 pm - Another down bar for FKLI !
If DJIA recover tonite, we may have a gap up day for FKLI tomorrow. Sell higher and buy lower.
2:42 pm - Anwar factor is on again ! See malaysiakini.com for more news
The FKLI gap down due to the bad news !
10:49 am - Even US is preventing certain counters on short selling.
SEC to Limit Short Sales of Fannie, Freddie, Brokers (Update6)
By Jesse Westbrook and David Scheer
July 15 (Bloomberg) -- The U.S. Securities and Exchange Commission will limit the ability of traders to bet on a drop in shares of brokerage firms, Freddie Mac and Fannie Mae as part of a crackdown on stock manipulation, the agency's chairman said.
Christopher Cox told the Senate Banking Committee the agency will require traders to hold shares of the two mortgage buyers and the brokerages before they execute a short sale. The order, to be in effect for as long as 30 days, will bar the practice called naked short selling, in which traders avoid the financial cost of borrowing shares when betting they'll fall.
``Since it's impossible to police false rumors, the next best option for protecting fragile financial institutions is to halt short-selling for a time being,'' said David Trone, analyst at Fox-Pitt Kelton Cochran Caronia Waller. ``The SEC's action is at least a partial measure.''
The SEC is investigating whether trading abuses contributed to the collapse of Bear Stearns Cos. in March and the 80 percent drop in the market value of larger rival Lehman Brothers Holdings Inc. this year. Fannie Mae and Freddie Mac have each lost about 80 percent of their value amid speculation the mortgage-market crisis may push the firms into insolvency.
Hedge-fund manager William Ackman, who oversees $6 billion at Pershing Square Capital Management, is among those betting shares of Fannie Mae and Freddie Mac will fall. There's no indication he is engaging in naked short selling, in which traders never borrow shares from their broker or deliver the stock to buyers.
SEC Reluctance
The SEC had been reluctant to curb short sales ``because it would require a major retooling of the plumbing of Wall Street,'' said James Angel, a professor at Georgetown University studying short sales. ``It's only when the big Wall Street firms are threatened that the SEC does something about it.''
Cox said the SEC also will draft rules ``to address these same issues across the entire market.''
Short-sellers, who borrow shares betting that they'll decline, are spreading rumors about Lehman in an organized attempt to depress the stock, according to Richard Bove, bank analyst at Ladenburg Thalmann & Co. in Lutz, Florida.
``As with Bear Stearns, Lehman has been targeted by the fear- trade,'' Fox-Pitt's Trone in a report yesterday. Lehman should go private to avoid attacks by short-sellers, he said.
Freddie Mac, down as much as 34 percent today before Cox's comments, fell 26 percent to $5.26 in New York Stock Exchange composite trading. Fannie Mae tumbled 27 percent. Lehman rose 82 cents, or 6.6 percent, to $13.22, ending a four-day slide.
More Costly
The order, published today, requires anyone making a short sale to first ``borrow or arrange to borrow'' the securities and then deliver them by the settlement date. It applies to shares in 19 firms including Citigroup Inc., JPMorgan Chase & Co. and UBS AG.
The order takes effect on July 21 and expires at the end of July 29. It may be extended for a total of 30 calendar days.
The SEC's proposal will raise the cost of short-selling a stock, said Gregory DePetris, co-founder of Quadriserv Inc., a New York brokerage that specializes in securities lending. ``There will be greater demand for shares,'' he said. ``It will make the process a little less easy.''
In traditional short selling, traders borrow stock through a broker and hope to profit by selling shares at a higher price and later buying them back at lower prices to repay the loan.
Naked short selling isn't necessarily illegal, unless authorities can prove fraud, such as a scheme to manipulate stock prices.
`More Efficient'
``Short-sellers in general help price discovery and make the market more efficient,'' said Warren Chiang, a fund manager at Mellon Capital Management, which oversees about $200 billion. ``But naked shorting isn't fair.''
U.S. Senator Charles Schumer questioned whether the SEC should restore the so-called uptick rule, which barred traders from short-selling stocks when prices are falling. The rule, scrapped in June 2007, was implemented after the Great Depression to prevent raids on companies.
While the regulator is considering ``some other kind of price test'' to regulate short selling, it has no plans to reinstitute the uptick rule, Cox said. ``It was just very clear that that rule no longer mattered,'' he said.
To contact the reporters on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net; David Scheer in New York at dscheer@bloomberg.net.
By Jesse Westbrook and David Scheer
July 15 (Bloomberg) -- The U.S. Securities and Exchange Commission will limit the ability of traders to bet on a drop in shares of brokerage firms, Freddie Mac and Fannie Mae as part of a crackdown on stock manipulation, the agency's chairman said.
Christopher Cox told the Senate Banking Committee the agency will require traders to hold shares of the two mortgage buyers and the brokerages before they execute a short sale. The order, to be in effect for as long as 30 days, will bar the practice called naked short selling, in which traders avoid the financial cost of borrowing shares when betting they'll fall.
``Since it's impossible to police false rumors, the next best option for protecting fragile financial institutions is to halt short-selling for a time being,'' said David Trone, analyst at Fox-Pitt Kelton Cochran Caronia Waller. ``The SEC's action is at least a partial measure.''
The SEC is investigating whether trading abuses contributed to the collapse of Bear Stearns Cos. in March and the 80 percent drop in the market value of larger rival Lehman Brothers Holdings Inc. this year. Fannie Mae and Freddie Mac have each lost about 80 percent of their value amid speculation the mortgage-market crisis may push the firms into insolvency.
Hedge-fund manager William Ackman, who oversees $6 billion at Pershing Square Capital Management, is among those betting shares of Fannie Mae and Freddie Mac will fall. There's no indication he is engaging in naked short selling, in which traders never borrow shares from their broker or deliver the stock to buyers.
SEC Reluctance
The SEC had been reluctant to curb short sales ``because it would require a major retooling of the plumbing of Wall Street,'' said James Angel, a professor at Georgetown University studying short sales. ``It's only when the big Wall Street firms are threatened that the SEC does something about it.''
Cox said the SEC also will draft rules ``to address these same issues across the entire market.''
Short-sellers, who borrow shares betting that they'll decline, are spreading rumors about Lehman in an organized attempt to depress the stock, according to Richard Bove, bank analyst at Ladenburg Thalmann & Co. in Lutz, Florida.
``As with Bear Stearns, Lehman has been targeted by the fear- trade,'' Fox-Pitt's Trone in a report yesterday. Lehman should go private to avoid attacks by short-sellers, he said.
Freddie Mac, down as much as 34 percent today before Cox's comments, fell 26 percent to $5.26 in New York Stock Exchange composite trading. Fannie Mae tumbled 27 percent. Lehman rose 82 cents, or 6.6 percent, to $13.22, ending a four-day slide.
More Costly
The order, published today, requires anyone making a short sale to first ``borrow or arrange to borrow'' the securities and then deliver them by the settlement date. It applies to shares in 19 firms including Citigroup Inc., JPMorgan Chase & Co. and UBS AG.
The order takes effect on July 21 and expires at the end of July 29. It may be extended for a total of 30 calendar days.
The SEC's proposal will raise the cost of short-selling a stock, said Gregory DePetris, co-founder of Quadriserv Inc., a New York brokerage that specializes in securities lending. ``There will be greater demand for shares,'' he said. ``It will make the process a little less easy.''
In traditional short selling, traders borrow stock through a broker and hope to profit by selling shares at a higher price and later buying them back at lower prices to repay the loan.
Naked short selling isn't necessarily illegal, unless authorities can prove fraud, such as a scheme to manipulate stock prices.
`More Efficient'
``Short-sellers in general help price discovery and make the market more efficient,'' said Warren Chiang, a fund manager at Mellon Capital Management, which oversees about $200 billion. ``But naked shorting isn't fair.''
U.S. Senator Charles Schumer questioned whether the SEC should restore the so-called uptick rule, which barred traders from short-selling stocks when prices are falling. The rule, scrapped in June 2007, was implemented after the Great Depression to prevent raids on companies.
While the regulator is considering ``some other kind of price test'' to regulate short selling, it has no plans to reinstitute the uptick rule, Cox said. ``It was just very clear that that rule no longer mattered,'' he said.
To contact the reporters on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net; David Scheer in New York at dscheer@bloomberg.net.
8:45 am - DJIA break lower below 11,000
I think DJIA will reverse back on the strength on back on the volume last nite.
Tuesday, July 15, 2008
12:32 pm - FKLI has formed a double bottom !
Look to short @ 1118 or higher for afternoon session.
Short for some of the clients and taken profits before lunch !
10:14 am - U.S. Stocks Fall, Led by Biggest Drop in Financials Since 2000
This is worrying as if banks in US are closing down !
By Elizabeth Stanton
July 14 (Bloomberg) -- U.S. stocks fell, sending financial shares to their biggest drop in eight years, on heightened concern that bank failures will spread.
Washington Mutual Inc. posted the steepest retreat ever and National City Corp. tumbled to a 24-year low after last week's collapse of IndyMac Bancorp Inc. spurred speculation that regional banks are short of capital. The companies said they've seen no unusual depositor activity. Fannie Mae and Freddie Mac erased an earlier rally fueled by Treasury Secretary Henry Paulson's plan to help rescue the largest U.S. mortgage lenders.
The declines pushed the Standard & Poor's 500 Financials Index of 89 companies down 6.1 percent, its steepest plunge since April 2000. The S&P 500 slid 11.19 points, or 0.9 percent, to 1,228.3. The Dow Jones Industrial Average lost 45.35, or 0.4 percent, to 11,055.19. The Nasdaq Composite Index slipped 26.21, or 1.2 percent, to 2,212.87. More than two stocks dropped for each that rose on the New York Stock Exchange.
``The factors that affected IndyMac are not isolated; while they're probably more severe, the pressures are evident in other financials,'' said Alan Gayle, the Richmond, Virginia-based senior investment strategist at Ridgeworth Capital Management, which oversees about $74 billion. The Treasury's plan for Fannie Mae and Freddie Mac is ``encouraging, but it does suggest that credit availability is going to remain somewhat impaired and borrowing costs will likely be higher.''
`Unmitigated Disaster'
Benchmark indexes rallied more than 1 percent each at the open as confidence in the banking system was boosted by Paulson's plan to ask Congress for authority to buy unlimited stakes in Fannie Mae and Freddie Mac and provide loans to them. Fannie and Freddie erased their advance after investor Jim Rogers said in a Bloomberg Television interview that the government's proposal was an ``unmitigated disaster'' and Goldman Sachs Group Inc. predicted the shares would resume falling.
The S&P 500 fell to the lowest level since June 2006, extending its drop from an October record to almost 22 percent. Record fuel prices and more than $400 billion of writedowns and credit losses globally stemming from the U.S. housing market collapse have dimmed the outlook for corporate profits.
Washington Mutual retreated $1.72, or 35 percent, to $3.23. The biggest U.S. savings and loan is seeing ``business as usual'' with no unusual depositor activity, spokesman Derek Aney said in an interview. National City, Ohio's biggest bank, tumbled 65 cents, or 15 percent, to $3.77 even after saying there was ``no unusual depositor or creditor activity.''
Lehman Brothers Holdings Inc. in a report today predicted a rise in loan-loss provisions at Washington Mutual for balance- sheet losses that may total $26 billion this year.
`Substantial Credit Losses'
Zions Bancorporation, the Salt Lake City-based lender with operations in 10 Western U.S. states, fell 23 percent to $19.73. First Horizon National Corp., Tennessee's biggest bank, slumped 25 percent to $5.04.
Goldman Sachs analysts recommended investors sell Zions and predicted dividend cuts may be in store for Zions, SunTrust Banks Inc., Comerica Inc. and Bank of America Corp.
``Substantial credit losses are going to have to be absorbed,'' said Henry Herrmann, chief executive officer of Waddell & Reed Financial Inc. in Overland Park, Kansas, which manages about $65 billion. ``We're right on the cusp of earnings season, and more and more of this is going to be manifest.''
M&T Bank Corp., the lender whose second-largest shareholder is billionaire investor Warren Buffett's Berkshire Hathaway Inc., plunged 16 percent to $58.82, its biggest drop since 2000. Second-quarter profit at the Buffalo, New York-based bank tumbled 25 percent on losses tied to mortgages.
Wachovia Corp., the fourth-largest U.S. bank, fell 15 percent to $9.84, a 17-year low, after being cut to ``neutral'' from ``buy'' at UBS AG, which predicted a dividend reduction to 1 cent and the sale of $5 billion of common shares.
IndyMac Seized
IndyMac became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the mortgage lender short on cash last week. The Pasadena, California-based company, which specialized in a type of mortgage that didn't require borrowers to document income and lost almost $900 million when borrowers fell behind on payments, was taken over after U.S. markets closed on July 11.
The successor entity, IndyMac Federal Bank, will cover 50 percent of uninsured deposits initially, its Chief Executive Officer John Bovenzi said yesterday. All accounts up to $100,000 will be fully insured under the Federal Deposit Insurance Corp.
Freddie, Fannie
Freddie Mac fell 64 cents, or 8.3 percent, to $7.11 after earlier rallying as much as 26 percent. Fannie Mae lost 52 cents, or 5.1 percent, to $9.73. The shares had surged 32 percent earlier. Paulson's proposal, which the Treasury anticipates will be incorporated into an existing congressional bill and approved this week, signals a shift toward an explicit guarantee of Fannie Mae and Freddie Mac debt.
The Federal Reserve separately authorized the firms to borrow directly from the central bank.
Goldman analyst Daniel Zimmerman said the plan won't benefit shareholders. He lowered his share-price forecast for Fannie Mae to $7 from $18 and for Freddie Mac to $5 from $17.
Fannie Mae tumbled 45 percent last week and Freddie Mac sank 47 percent on concern the two companies, which own or guarantee about half of the $12 trillion of U.S. mortgages, may require a bailout that would wipe out shareholders.
`Sad Commentary'
``It's a fairly sad commentary that the government has to step in and take these actions,'' Liam Dalton, New York-based chief executive officer of Axiom Capital Management, which oversees $1.3 billion, said on Bloomberg Television. ``The overall market probably remains in a malaise, because the market is very respectful of the fundamental issues.''
The S&P 500 Financials Index to its lowest level since October 1998, two months after Russia's debt default sent the index down 23 percent in a month.
Apple Inc. rallied $1.30 to $173.88. The company sold 1 million iPhones in the first three days following the new model's debut. Piper Jaffray & Co. analyst Gene Munster estimated sales of 425,000 devices in the first three days.
``IPhone 3G had a stunning opening weekend,'' Chief Executive Officer Steve Jobs said in a statement today, after starting sales of the device in 21 countries July 11. It took 74 days to sell a million of the original iPhone, which was only available in the U.S. at first, he said.
`Positive Sign'
Anheuser-Busch Cos. rose 37 cents to $66.87. InBev NV will buy Anheuser-Busch for $52 billion, putting the maker of Budweiser beer under Belgian control after almost 156 years as a family-run company. The $70-a-share transaction ends a month of court fights and public denunciations as InBev tried to acquire the St. Louis-based beermaker in a hostile takeover.
``A takeover such as the InBev-Anheuser one is a positive sign,'' Thomas Tilse, head of portfolio strategy for private clients at Cominvest in Frankfurt, which has the equivalent of $101 billion under management, said in a Bloomberg Television interview. ``Such mergers and acquisitions show that stocks are still very attractive and cheap at their current levels.''
Allegheny Technologies Inc. rose $4.86, or 9.7 percent, to $55.21, the biggest advance in the S&P 500. The specialty-metals producer that supplies titanium to Boeing Co. said second-quarter profit was $1.65 to $1.67 a share, exceeding the $1.52 average analyst estimate in a Bloomberg survey.
Alcoa Inc. gained 30 cents to $34.94. Goldman Sachs Group Inc. upgraded the third-largest producer of aluminum to ``buy'' from ``neutral,'' citing growing aluminum consumption in China that could offset shrinking demand in the U.S.
To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net. Last Updated: July 14, 2008 17:14 EDT
By Elizabeth Stanton
July 14 (Bloomberg) -- U.S. stocks fell, sending financial shares to their biggest drop in eight years, on heightened concern that bank failures will spread.
Washington Mutual Inc. posted the steepest retreat ever and National City Corp. tumbled to a 24-year low after last week's collapse of IndyMac Bancorp Inc. spurred speculation that regional banks are short of capital. The companies said they've seen no unusual depositor activity. Fannie Mae and Freddie Mac erased an earlier rally fueled by Treasury Secretary Henry Paulson's plan to help rescue the largest U.S. mortgage lenders.
The declines pushed the Standard & Poor's 500 Financials Index of 89 companies down 6.1 percent, its steepest plunge since April 2000. The S&P 500 slid 11.19 points, or 0.9 percent, to 1,228.3. The Dow Jones Industrial Average lost 45.35, or 0.4 percent, to 11,055.19. The Nasdaq Composite Index slipped 26.21, or 1.2 percent, to 2,212.87. More than two stocks dropped for each that rose on the New York Stock Exchange.
``The factors that affected IndyMac are not isolated; while they're probably more severe, the pressures are evident in other financials,'' said Alan Gayle, the Richmond, Virginia-based senior investment strategist at Ridgeworth Capital Management, which oversees about $74 billion. The Treasury's plan for Fannie Mae and Freddie Mac is ``encouraging, but it does suggest that credit availability is going to remain somewhat impaired and borrowing costs will likely be higher.''
`Unmitigated Disaster'
Benchmark indexes rallied more than 1 percent each at the open as confidence in the banking system was boosted by Paulson's plan to ask Congress for authority to buy unlimited stakes in Fannie Mae and Freddie Mac and provide loans to them. Fannie and Freddie erased their advance after investor Jim Rogers said in a Bloomberg Television interview that the government's proposal was an ``unmitigated disaster'' and Goldman Sachs Group Inc. predicted the shares would resume falling.
The S&P 500 fell to the lowest level since June 2006, extending its drop from an October record to almost 22 percent. Record fuel prices and more than $400 billion of writedowns and credit losses globally stemming from the U.S. housing market collapse have dimmed the outlook for corporate profits.
Washington Mutual retreated $1.72, or 35 percent, to $3.23. The biggest U.S. savings and loan is seeing ``business as usual'' with no unusual depositor activity, spokesman Derek Aney said in an interview. National City, Ohio's biggest bank, tumbled 65 cents, or 15 percent, to $3.77 even after saying there was ``no unusual depositor or creditor activity.''
Lehman Brothers Holdings Inc. in a report today predicted a rise in loan-loss provisions at Washington Mutual for balance- sheet losses that may total $26 billion this year.
`Substantial Credit Losses'
Zions Bancorporation, the Salt Lake City-based lender with operations in 10 Western U.S. states, fell 23 percent to $19.73. First Horizon National Corp., Tennessee's biggest bank, slumped 25 percent to $5.04.
Goldman Sachs analysts recommended investors sell Zions and predicted dividend cuts may be in store for Zions, SunTrust Banks Inc., Comerica Inc. and Bank of America Corp.
``Substantial credit losses are going to have to be absorbed,'' said Henry Herrmann, chief executive officer of Waddell & Reed Financial Inc. in Overland Park, Kansas, which manages about $65 billion. ``We're right on the cusp of earnings season, and more and more of this is going to be manifest.''
M&T Bank Corp., the lender whose second-largest shareholder is billionaire investor Warren Buffett's Berkshire Hathaway Inc., plunged 16 percent to $58.82, its biggest drop since 2000. Second-quarter profit at the Buffalo, New York-based bank tumbled 25 percent on losses tied to mortgages.
Wachovia Corp., the fourth-largest U.S. bank, fell 15 percent to $9.84, a 17-year low, after being cut to ``neutral'' from ``buy'' at UBS AG, which predicted a dividend reduction to 1 cent and the sale of $5 billion of common shares.
IndyMac Seized
IndyMac became the second-biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the mortgage lender short on cash last week. The Pasadena, California-based company, which specialized in a type of mortgage that didn't require borrowers to document income and lost almost $900 million when borrowers fell behind on payments, was taken over after U.S. markets closed on July 11.
The successor entity, IndyMac Federal Bank, will cover 50 percent of uninsured deposits initially, its Chief Executive Officer John Bovenzi said yesterday. All accounts up to $100,000 will be fully insured under the Federal Deposit Insurance Corp.
Freddie, Fannie
Freddie Mac fell 64 cents, or 8.3 percent, to $7.11 after earlier rallying as much as 26 percent. Fannie Mae lost 52 cents, or 5.1 percent, to $9.73. The shares had surged 32 percent earlier. Paulson's proposal, which the Treasury anticipates will be incorporated into an existing congressional bill and approved this week, signals a shift toward an explicit guarantee of Fannie Mae and Freddie Mac debt.
The Federal Reserve separately authorized the firms to borrow directly from the central bank.
Goldman analyst Daniel Zimmerman said the plan won't benefit shareholders. He lowered his share-price forecast for Fannie Mae to $7 from $18 and for Freddie Mac to $5 from $17.
Fannie Mae tumbled 45 percent last week and Freddie Mac sank 47 percent on concern the two companies, which own or guarantee about half of the $12 trillion of U.S. mortgages, may require a bailout that would wipe out shareholders.
`Sad Commentary'
``It's a fairly sad commentary that the government has to step in and take these actions,'' Liam Dalton, New York-based chief executive officer of Axiom Capital Management, which oversees $1.3 billion, said on Bloomberg Television. ``The overall market probably remains in a malaise, because the market is very respectful of the fundamental issues.''
The S&P 500 Financials Index to its lowest level since October 1998, two months after Russia's debt default sent the index down 23 percent in a month.
Apple Inc. rallied $1.30 to $173.88. The company sold 1 million iPhones in the first three days following the new model's debut. Piper Jaffray & Co. analyst Gene Munster estimated sales of 425,000 devices in the first three days.
``IPhone 3G had a stunning opening weekend,'' Chief Executive Officer Steve Jobs said in a statement today, after starting sales of the device in 21 countries July 11. It took 74 days to sell a million of the original iPhone, which was only available in the U.S. at first, he said.
`Positive Sign'
Anheuser-Busch Cos. rose 37 cents to $66.87. InBev NV will buy Anheuser-Busch for $52 billion, putting the maker of Budweiser beer under Belgian control after almost 156 years as a family-run company. The $70-a-share transaction ends a month of court fights and public denunciations as InBev tried to acquire the St. Louis-based beermaker in a hostile takeover.
``A takeover such as the InBev-Anheuser one is a positive sign,'' Thomas Tilse, head of portfolio strategy for private clients at Cominvest in Frankfurt, which has the equivalent of $101 billion under management, said in a Bloomberg Television interview. ``Such mergers and acquisitions show that stocks are still very attractive and cheap at their current levels.''
Allegheny Technologies Inc. rose $4.86, or 9.7 percent, to $55.21, the biggest advance in the S&P 500. The specialty-metals producer that supplies titanium to Boeing Co. said second-quarter profit was $1.65 to $1.67 a share, exceeding the $1.52 average analyst estimate in a Bloomberg survey.
Alcoa Inc. gained 30 cents to $34.94. Goldman Sachs Group Inc. upgraded the third-largest producer of aluminum to ``buy'' from ``neutral,'' citing growing aluminum consumption in China that could offset shrinking demand in the U.S.
To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net. Last Updated: July 14, 2008 17:14 EDT
8:47 am - FKLI open lower due to gap down in anticipating lower cash market !
DJIA is also heading low and the major support 11,170 becomes its resistance.
Monday, July 14, 2008
5:29 pm - FKLI retract back to 38.2%
Normal 50% retracement is 1160.0.
FKLI can go up some more to 1160.0
2:59 pm - FKLI is rebounding back after sold off from this morning !
Short for some clients this morning and taken profit already !
11:55 am - KLSE outlook by Bill Wermine
Dear Traders,
Oil bubble on the brink of major bust. Demand is falling while supply is increasing. Bush and his chronies will hold up the price until the US November general elections for his final squeezing of Joe Public before he retires rich to his ranch in Texas. The speculators are part of his game plan as they amass huge fortunes in long positions in energy futures contracts. In 2003 speculators held USD 13 billion and now in 2008 USD 260 billion in energy futures contracts. When buyers are exhausted, expect a massive collapse.
Bush with his power has resisted regulations to control the speculators but when he loses the general election, Obama who is not supported by the oil industry, Wall St Banks and institutions, may pull the plug and precipitate a bust. Obama is not a friend of the speculators and Wall St banks as his support base is much wider and more popular based. Bush's power base is the super rich, the connected, oil companies, defense contractors and the insiders who control the Wall St banks and institutions
Obama's win could be supportive of stock markets worldwide. Refer to Martin's attached KLSE report.
On Saturday 19 July we will have our monthly Traders Club at my office at Phillip from 10 to 1 PM. Agenda includes a technical outlook for crude oil/ Dow Jones/ and the Aussie Dollar by Fund Manager Andy Lim- a KLSE outlook by Pong, who is now the research director of Jupiter securities, and a my final briefing on Man Alternative investment before the 31 July closing date. This briefing will include a short video clip by Robert Kiyosaki which exposes how the financial establishment manipulates the herd of sheep investors to strip them of their hard earned savings and wealth. I will also explain the 4 % sales charge rebate we enjoy for the new fund launch
As seats in Phillip training room are limited,please let me know if you wish to come .
Have a profitable week ahead
Bill
Oil bubble on the brink of major bust. Demand is falling while supply is increasing. Bush and his chronies will hold up the price until the US November general elections for his final squeezing of Joe Public before he retires rich to his ranch in Texas. The speculators are part of his game plan as they amass huge fortunes in long positions in energy futures contracts. In 2003 speculators held USD 13 billion and now in 2008 USD 260 billion in energy futures contracts. When buyers are exhausted, expect a massive collapse.
Bush with his power has resisted regulations to control the speculators but when he loses the general election, Obama who is not supported by the oil industry, Wall St Banks and institutions, may pull the plug and precipitate a bust. Obama is not a friend of the speculators and Wall St banks as his support base is much wider and more popular based. Bush's power base is the super rich, the connected, oil companies, defense contractors and the insiders who control the Wall St banks and institutions
Obama's win could be supportive of stock markets worldwide. Refer to Martin's attached KLSE report.
On Saturday 19 July we will have our monthly Traders Club at my office at Phillip from 10 to 1 PM. Agenda includes a technical outlook for crude oil/ Dow Jones/ and the Aussie Dollar by Fund Manager Andy Lim- a KLSE outlook by Pong, who is now the research director of Jupiter securities, and a my final briefing on Man Alternative investment before the 31 July closing date. This briefing will include a short video clip by Robert Kiyosaki which exposes how the financial establishment manipulates the herd of sheep investors to strip them of their hard earned savings and wealth. I will also explain the 4 % sales charge rebate we enjoy for the new fund launch
As seats in Phillip training room are limited,please let me know if you wish to come .
Have a profitable week ahead
Bill
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