Every Day is a New day.....

Lessons learn from yesterday.......:

• "Yesterday losses does not mean that today will also be defeated...."
  

• " Take into Accounts that great love and great achievements involve GREAT RISK "
  

• " The most important is when you lose, NEVER lose the lesson"

Again every day is a new day.... Tomorrow will be better.....!!

Saudi Arabia and Asia....

High oil prices and increases in Saudi Arabia's oil output have improved the health of Saudi Arabia's fiscal position, and in turn provided a boost to domestic demand. Foreign investment has also strengthened, driven by the development of Saudi's gas, petrochemicals, power and water supply projects. Against this background, the Saudi economy grew by an estimated 5.4% in 2006, and is expected to further expand by 5.3% in 2007.Except 2000, Saudi Arabia had recorded fiscal deficits from 1983 to 2002. In order to contain the deficits, the Saudi government had exercised restraints on its spending. Helped by a strengthening of oil prices, the government has recorded budget surplus since 2003. The budget surplus is expected to continue in 2007 amid the still high oil prices, as the majority of the government revenue comes from oil earnings.On the external front, over three quarters of Saudi's exports are oil and energy products, such as petrochemicals, plastics and related raw materials. Leading export destinations are the US, Japan, South Korea, India and China. Meanwhile, major import items include machinery, transport equipment, foodstuffs, metals, minerals, textiles and clothing. Principal suppliers are the US, Japan, Germany, China and the UK.

Trade Policy

In December 2005, Saudi Arabia became the 149th member of the WTO after over 12 years of negotiations. In 1993, when Saudi Arabia first applied for membership of the General Agreement on Tariff and Trade (GATT), the predecessor of the WTO, 75% of Saudi's tariffs on imports were at 12%. Since 2003, 85% of tariffs have been lowered to 5% or less.Saudi Arabia's WTO commitments provide for foreign participation in its wholesale and retail trade. Upon accession, foreign companies can hold up to 51% of the equity in a wholesale or retail business. The limit will be increased to 75% by December 2008.However, some products remain restricted from entering Saudi Arabia for religious, health or security reasons. Prohibited items include alcoholic beverages, pork, non-medical drugs, non-Islamic religious materials, weapons and weapon-related electronic equipment. In addition, foreign companies that are deemed to support Israel in one way or another are blacklisted because of the Arab League boycott of Israel, to which Saudi Arabia is a participant.Tariffs are mostly ad valorem. The tie between Saudi Arabia and its fellow members of the Gulf Co-operation Council (GCC) -- Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates -- is strong. In November 1999, the GCC agreed to form a customs union. The customs union took effect from 1 January 2003. The accord establishes a single tariff of 5% on 1,500 imported items from non-member countries. It also provides a list of other essential items that can be imported duty-free. Under the accord, goods imported into the GCC area can be freely transported subsequently throughout the region without paying additional tariffs.

Hong Kong's Trade with Saudi Arabia^

Hong Kong's total exports to Saudi Arabia during January-November 2006 surged by 22% to US$335 million, after a 2% growth to US$300 million in 2005. Major export items to Saudi Arabia during January-November 2006 included watches and clocks (18% of the total), telecommunications equipment and parts (13%), women's or girls' wear of textile fabrics (10%), other apparel articles (7%) and footwear (4%).On the other hand, Hong Kong's imports from Saudi Arabia increased by 7% to US$442 million during January-November 2006, after a 17% growth to US$435 million in 2005. Major import items from Saudi Arabia during January-November 2006 included polymers of ethylene in primary forms (41% of the total), hydrocarbons (30%), other plastics in primary forms (9%), alcohols and phenols (6%) and non-electric engines and motors (5%)

Power Ranger.....

Power Sector ...


Over in Singapore, Temasek Holdings said it would sell its three power stations, Power Seraya, Senoko Power and Tuas Power, from September 2007 with completion targeted for the end of next year or early 2009.

This signals yet another attempt by the Government of Singapore to dispose the three power plants. Following the liberalization process for the energy market started in 1995, the government in 2000 said that it was lifting foreign ownership limit to sell the power generation companies which account for about three quarter of electricity produced in the island state. But weak market sentiment and disputes over gas supplies saw the divestment repeatedly postponed.

Temasek claimed that the conditions are more conducive now. Singapore's economy is set for continued growth and recent legislative changes have set the stage for liberalization. Moreover, the power plants, we believe, have undergone significant improvements to boost their efficiency levels.

The changes in ownership are not expected to affect electricity selling prices. Under a system put in place (purportedly a power pooling system) SP Services buys electricity from all generating companies before selling to households and industrial consumers. SP Services also has an automated pricing mechanism in place to pass-on any fluctuation in energy costs. There would also not be any changes in management and staff for another three years under the collective agreements signed recently.

Each power plants is said to be worth S$2bn-S$3bn. The sale may be by way of tender or via initial public offers but Temasek said the first power plant would likely be offered through a tender process. Temasek's financial advisors are Morgan Stanley and Credit Suisse.

Temasek did not say who are the interested parties. But previous attempts to sell the power assets attracted foreign parties like Intergen (US) and Tokyo Electric Power Company (Japan). Tenaga Nasional and YTL Power were also interested to bid for them at one time. Singapore-based interested parties include Keppel Corp and SembCorp Industries (which have their own power plants) and CitySpring Infrastructure Trust (Temasek-linked).

Trade Idea: maintaining Buy recommendations for Tenaga and YTL Power for their earnings growth and steady dividend prospects. At this juncture, it is expect the offer to cause a hollowing out on utilities investment in Malaysia. With the three power plants already operating at high efficiency levels and limited growth potentials, ROI is likely to be the main driver behind most bidders. That aside, the news flow could provide some mild excitement to the sector.

Lowest since 1991 ......

US Homebuilders’ confidence fell this month to the lowest since February 1991 as interest rates climbed and delinquencies surged. The National Association of Home Builders/Wells Fargo index of sentiment declined to 28 this month from 30 in May. Readings below 50 mean most homebuilders view the housing market conditions as poor. Homebuilders are losing money as they cut prices to stem a slide in sales as banks tightened the standards for mortgages applications and approvals. Builders have scaled back projects to work off bloated inventories, a sign housing construction will weigh on growth for the rest of the year. Federal Reserve last month acknowledged that the housing recession will hold down growth longer than they had anticipated, but at the same time maintained the outlook for “moderate'' growth in the overall economy as consumer spending gains and manufacturing accelerates.

Crude oil: Approaching US$70 per barrel due to risks on Nigerian supplies. Crude oil price for July delivery jumped by US$1.09 or 1.6% to nine-month high of US$69.09 per barrel after Chevron Corp. and Eni SpA yesterday reported attacks on facilities in Nigeria, where the two main oil workers’ unions plan to join an indefinite general strike.

Hedge Funds Forecast Windfall in Europe's Growing Power Market

Hedge fund manager Marcel Melis ignores stock charts, commodities reports and bond prices as he sips his morning coffee. All his attention is focused on one thing: the weather. Melis analyzes forecasts for areas from the snowcapped mountains of Norway to the beaches of Spain's Costa del Sol to predict changes in demand for power and gas. The founder of Energy Capital Management BV, which has raised $60 million and started trading in October, targets returns of 25 to 30 percent.

The number of hedge funds with more than a quarter of their capital in European energy jumped fivefold to 50 last year as German utilities began releasing data on plant outages, helping traders forecast supply in the region's largest market, according to Energy Hedge Fund Center LLC. The value of derivatives traded on the European Energy Exchange in Germany more than doubled to 58.75 billion euros ($78.08 billion). European power prices are on the rise after falling to records following the mildest winter in more than 100 years. Germany's third-quarter power contract has been the focus of traders ever since April 11, when the U.K.'s Met Office said the summer in northwest Europe would probably be hotter than average, boosting demand for power and increasing the risk of price spikes. The contract rose as high as 49.30 euros a megawatt hour on May 18, after dropping to 36.40 in February. It closed at 44.25 euros on June 14.

US Treasury

Worries over rising global interest rates amidst escalating inflation and robust global economic growth pushed US Treasury yields to new highs on Tuesday. The 10T reached 5.30%, a level not seen since May 2002. Overnight, China’s consumer prices rose a higher-than-expected 3.4% year-on-year in May. That rattled Treasuries as the data reinforced fears about rising global inflation and the need for higher interest rates to keep inflation in check. In addition, lukewarm reception from indirect bidders for the $8 billion 10-year note auction also spooked the market. Indirect bidders only bought 10.9% of the issue, down from 44.3% during the prior auction. EUR/USD was in a downtrend the entire day, reaching an 11-week low towards late NY trading. EUR/USD fetched $1.3303, down from $1.3359 Monday. The jump in US bond yields lure traders away from the euro and towards the greenback. Elsewhere, the yen rose marginally against the greenback as investors cut back on their yen carry trades in lieu of the drop in risk appetites recently. The yen was last reported done at 121.69 yen compared to 121.73 yen Monday.

Asian Dollar Credits

Asian dollar bonds slumped on Tuesday amidst a renewed climb in US Treasury yields. Nonetheless, prior to the sell-off in the afternoon, sentiment was quite robust in the morning session. As bond yields rose towards London open, sellers surfaced in droves widening credit spreads up to 5bps in the High Grade segment.
The High Yield segment bore the brunt of the selling on Wednesday morning. The Phils were quoted more than $1 lower on the longer-end whereas the Indons were also quoted close to $2 lower along the 2037 maturities.

Market Outlook for the week ...

Last weeks’s market sentiment was affected by a number of negative news such as (i) bird flu, (ii) Megan Media’s >RM300m irregular accounting and (iii) the sharp retracement of CPO due to the market talk of delaying the increment of export duty by the Indonesian Government. On a positive note, Volkswagen is back into the picture with Proton. Technically speaking, we believe the KLCI to fluctuate within a lower trading range between 1340 and 1365, for the week due to weaker technical setups. Nonetheless, we expect the lower liners to shine as per the “more promising” technical picture.

Broadly inline, but … As expected the KLCI oscillated within the range of 1345/75 in the previous week. Though more positive, we have yet to see any meaningful improvement in trading volume,. We reckon the thinly traded volume could be due to the “school holiday” period and expect trading volume to improve in tandem with the end of the long holidays. Nonetheless, the weak weekly closing of KLCI coupled with the weaker technical indicators , could suggest a lower trading range ahead. Based on TD Range Projection methodology, we expect the KLCI to fluctuate between the levels of 1340 and 1365 for the week. To support the weak upward momentum, the KLCI needs to clear and sustain above the 1365-expected week high during early of the week (with the help of strong overnight Dow’s performance).

Asian Stocks Rise on Japan's Economic Growth

Japan's economy expanded more than the government initially reported in the first quarter after better-than-expected spending by companies. The world's second-largest economy grew at an annual 3.3 percent rate in the three months ended March 31, the Cabinet Office said in Tokyo today, faster than the 2.4 percent preliminary number.

``Capital expenditure figures have shown consistent growth and they are what have been leading the economy for a long, long time, backed by corporate earnings,'' said Graham Davis, director of the Economist Intelligence Unit in Tokyo. Business investment surged 13.6 percent to a record in the quarter from a year earlier, the Finance Ministry said last week. The release accounted for about 60 percent of the capital spending component of GDP.

``Capital spending is solid now and has room to grow,'' said Yoshiki Shinke, an economist at Dai-Ichi Life Research Institute in Tokyo. ``We've been seeing brighter data out of Japan recently so there's no reason to be pessimistic.'' The lowest borrowing costs in the industrialized world and sales and profits at record levels are encouraging companies to refurbish factories and add capacity, making it likely investment will help the economy avoid a slowdown even as exports cool. Net exports -- the difference between exports and imports -- added 0.5 percentage point to first-quarter growth, revised up from 0.4 percent, as imports rose less than initially reported.

Malaysia Finds Bird-Flu Virus in Village Outside Kuala Lumpur

Malaysia has found the bird flu virus in a village outside the capital Kuala Lumpur and will cull poultry in the area to prevent its spread, the Department of Veterinary Services said today.Samples taken from Paya Jaras Hilir village, which reported the sudden death of 60 chickens within three days on June 2, tested positive for highly pathogenic avian influenza, or HPAI, the department said in a faxed release.The H5N1 strain of the bird flu virus, which has caused deaths among humans in neighboring Indonesia, is part of the HPAI group. The department didn't say if H5N1 was detected.Malaysia reported its first outbreak of avian influenza in more than a year in February 2006, when the H5N1 strain killed 40 chickens in the state of Selangor. The country declared itself free of the disease four months later.

China's Stocks Tumble Again.......

China's stocks tumbled after the government's main securities newspaper signaled that policy makers won't try to arrest a slump that wiped out $224 billion of market value in the previous three trading days.

The CSI 300 Index dropped 7.2 percent to 3530.19 as of 2:40 p.m. local time. The measure, which tripled in the past 10 months, has plunged 15 percent from its May 29 peak after the government increased the tax on share trades to 0.3 percent.

The speed that stock prices soared by was ``extremely unusual'' and highlighted ``structural bubbles'' in the market, the state-owned China Securities Journal wrote in an editorial.
About half of the stocks included in the CSI 300 plunged by the 10 percent daily limit, including Huaneng Power International Inc., the nation's largest electricity producer, and Air China Ltd., the biggest international carrier.

``Investors, particularly those who have recently entered the market, are a bit disappointed that the government hasn't done anything to support the market,'' said Fan Dizhao, who helps manage about $1.8 billion at Guotai Asset Management Co. in Shanghai. China Vanke Co. led declines among property developers after a newspaper report said the government will soon announce measures to cool the real estate market, including increasing the supply of land. Even after the recent declines, the CSI 300, which tracks yuan-denominated A shares listed on China's two exchanges, is up 72 percent this year.

The problem is here why the regional market not following the fall ? Is this a golden opportunity for you to buy in more shares at lower price ? This question I strongly believed that nobody will answer me directly because there is no specific answer for this. Again we need to Let The Market Rule....