Indonesia's private jet demand soars.

Business is booming for Indonesia's luxury jet charter firm Enggang Air Services and the company's CEO Donnie Armand tells CNBC he is planning to expand his fleet size to meet the growing demand.

"Private jets in the United States average 30-50 hours of flying time per month, we average around 75 hours per month, well above the industry," said Armand, adding that Enggang is going to place orders for two 20-plus seater business jets this week, bringing its fleet size to 6.

According to Armand, Indonesia will take delivery of an estimated $500 million worth of private jets this year. The country already has an estimated 18 jet charter companies operating in the domestic market, and this number is climbing.

Jakarta-based budget carrier, Lion Air is the latest Indonesian company to announce an order for private jets. The airline, which plans to launch its own private jet charters, confirmed on Wednesday at the Singapore Airshow that it had purchased two Hawker 900XP mid-sized business jets fora list price of $64 million, with options for two additional aircraft from the U.S-based manufacturer.

With this growing interest, international jet manufactures are identifying Southeast Asia's largest economy as a key target market in the region, in addition to China and India.

"I would single out Indonesia as the strongest market in Southeast Asia. It's been that way for the past 24 months, and going into 2012, I think it's going to continue to lead the region," said Pasha Saleh, Regional Sales director, Southeast Asia at Hawker Beechcraft.

Jose Costas, vice President for Marketing & Sales, Asia Pacific, for Brazil-based aircraft manufacturer Embraer, says that alongside the country's growing wealth, the topography of Indonesia is a large driver behind private jet travel.

"With over 17,000 islands spanning over 3,000 miles, companies need an efficient mode of transportation to shuttle employees between their headquarters and the locations of the mines, for example," Costas said.

Corporate executives in the mining, oil and gas and agriculture sectors are currently leading the demand for private jets.

"The demand for travel is enormous and the (domestic) airline network is not there yet," Costas added. Embraer, the fourth largest aircraft maker, has sold 8 executive jets, ranging from a list price of $9.5 million to $54 million, in the country since late-2004.

Asia, as a whole, currently remains a relatively small private jet market compared to the rest of the world, but the region will account for 16 percent or $40 billion of total orders over the next 10 years, according to industry estimates.

Pleasure Jets

While business travel makes up 90 percent of private jet usage in Indonesia, charter companies and manufactures are seeing growing interest around non-business, private jet travel by high net worth individuals looking for a weekend getaway. The country's millionaire population is set to treble to 100,000 by 2015 according to a report by CLSA and Julius Baer.

"High GDP growth has resulted in an increasing number of high net worth individuals who can afford this kind of luxury," Armand said, adding that some of the most popular destinations include the Maldives, Alice Springs and Phuket.

A 5-hour journey from Indonesia to Maldives on a chartered 14-seater private jet could cost up to $100,000 or approximately $7,100 per passenger, he said. This is around double the price of a Singapore Airlines business class ticket ($3,757) to the same destination.

Limitations to Growth

While prospects for the private jet sector in Indonesia are bright, industry experts say it is crucial for infrastructure surrounding private jets to improve in order for the segment to realise its full growth potential.

"A lot of the (smaller) airports that are developed don't necessarily have runways long enough to support some of the bigger (20-seater) airplanes," said Saleh.

However, Saleh says there are positive signs that indicate the government is moving in the right direction. The government's flight inspection division recently purchased a private jet to fly to different airports to check on safety conditions. "It's an indication of the government's willingness to meet demand," he said.

(source:CNBC)

Malaysia Islamic clerics forbid forex trading

Malaysia's highest Islamic body has issued an edict forbidding foreign exchange trading by Muslim individuals, saying such speculation violates Islamic law.

The National Fatwa Council ruled forex trading by money changers or between banks was allowable but trading by individuals "creates confusion" among the faithful, according to a report issued Wednesday by state news agency Bernama.

Council chair Abdul Shukor Husin warned "there are many doubts about it (forex trading) and it involves individuals using the Internet, with uncertain outcomes," Bernama reported.

"A study by the committee found that such trading involved currency speculation, which contradicts Islamic law," he was quoted saying.

A council official confirmed the ruling to AFP but gave no further details.

Islam lays out a strict code of ethics for business that forbids speculation and usury.

While Malaysia's brand of Islam is more moderate than in much of the Muslim world, some 60 per cent of its 28 million people are Muslim and remain subject to Islamic law in civil affairs.

In 2008, the National Fatwa Council banned yoga for Muslims, saying it could erode their faith.
That triggered an uproar from moderate Muslims, prompting then prime minister Abdullah Ahmad Badawi to wade in, saying Muslims could do yoga as long as it had no Hindu spiritual elements.

In my opinion,the reason for this banning is that the government will lose revenue in terms of brokerage and stamp duties.Just look at the number forecast outlets locally where Muslims are gambling in a big way.

China big soya bean consumer

China,the world's largest cooking oil user,soyabean importer and oilseed consumer signed agreements in Iowa to purchase 8.62 million metric tons of the oilseed from U.S. suppliers in a deal valued at $4.3 billion.

Soybeans will be supplied by companies including Cargill Inc., Archer Daniels Midland Co. (ADM), Bunge Ltd. (BG) and CHS Inc., Iowa Soybeans Association Chief Executive Office Kirk Leeds said today in Des Moines, Iowa, during a U.S.-China trade cooperation conference. Iowa Governor Terry Branstad is hosting a two-day visit by Chinese Vice President Xi Jinping, 58, who is slated to become president in March 2013. Iowa is the biggest U.S. producer of corn, soybeans, hogs and eggs.

“It is phenomenally important to have Vice President Xi here because it says that Iowa is an important place to do business,” Leeds said yesterday in an interview. “These agreements are the direct result of activities by U.S. soybean groups in China since 1981 to promote soybean-meal demand in livestock, chicken and aquaculture feed.”

China became the largest buyer of U.S. farm products in 2010, and last year boosted purchases to $22.17 billion, U.S. Department of Agriculture data show. The nation purchased 20.6 million metric tons of soybeans from the U.S. last year, or 60 percent of the total shipped overseas. China probably will increase purchases from all suppliers by 62 percent in the next decade to 90 million tons from a projected 55.5 million this year, the USDA said Feb. 13.

It would take half of the Iowa soybean crop just to feed China’s fish,” said Leeds, who will be traveling to China next month on a sales-promotion trip for the producer-funded organization. “Soybean profitability depends on international demand, especially from China.”

Additional sales agreements may be announced in Los Angeles on Feb. 17, bringing the total for this week above the 11.5 million tons reached during a similar trade visit in Chicago last year, Leeds said. The 2011 deals involved 21 purchase agreements valued at $6.7 billion.

Iowa farm exports to China in 2010 were 13 times larger than in 2000, data from Iowa Department of Agriculture show. Agriculture and related industries contributed 27 percent to the state economy in 2010 and 17 percent of Iowa workforce is employed in producing food.

Soybeans have jumped 5.1 percent this year on the Chicago Board of Trade, partly as hot, dry weather damaged crops in Brazil and Argentina, the two biggest exporters after the U.S. last year. Today, the price reached $12.765 a bushel, the highest since Sept. 27, on speculation that China may increase purchases from the U.S. to rebuild inventories and cushion against any additional adverse global weather later this year.

Earlier today, the government reported U.S. exporters sold China 116,000 tons of soybeans for delivery before Aug. 31.

China Grain Reserves Corp., is the manager of state stockpiles in China.

Tracking the weekly Dow.
Economic calender:Empire State Manufacturing Survey,Industrial Production,Housing Market Index,FOMC Minutes.
Dow Futures is two market days to expiry.

Weekly candlestick pattern as at 15/02/12.
Week 1:Bullish start.
Week 2:Spinning Top
Week 3:Bearish Pullback.
As at today,the Dow is heading for a healthy correction and will break through the month's low.
Since it opened with an unshaven bottom,it will try to make a touchup with a lower shadow.This can be easily done due to a tight range of a mere 345.43 points performed so far.
The market should be grateful for the EU to use Greek debts issue as a volatility tool to fool investors otherwise how are they going to make money from market fear.
Volatilty is golden opportunity and excitement.

Canada cheap stocks.

Canada offers wide range of investment in penny stocks.Opportunities are a plentiful in penny stocks with low capital outlay but good capital appreciation potential.

The most natural reason that Canada is a land full of penny stock opportunities is that it is a land full of natural resources.

The Canadian dollar gained for a third straight day against its U.S. counterpart for the first time in February as crude oil, the nation’s biggest export, touched the highest level in a month.

The currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, rose the most in almost two weeks and then pared gains as Greek Finance Minister Evangelos Venizelos said Europe’s wealthier countries are toying with the idea of expelling the country from the 17-nation euro area.

From oil, gold, and diamonds, to potash and other more industrial type commodities, there are immense stores of these within the Canadian borders and as such many companies setup shop and operate in Canada to seek out and find these resources. If and when they do the companies then face the decision to grow larger or become acquired by another company. In either case the investor is surely the winner.

The US surely outnumbers Canada in the number of securities listed in its various exchanges but the reality is that the US markets are rife with frauds. There are so many going on that it’s just not possible for the SEC to manage to find them all. So the frauds continue. In Canada however, the listing requirements for the Toronto Venture Exchange do make it more difficult for fraud to occur. Canada is also a much smaller investing landscape and most of the time the scam artists are only concerned with the bigger market so once again Canada remains safer than its southern counterpart.

So the Canadian small cap equities market is clearly more appealing than the US for the abundance of natural resources within the borders of this northern country and the security that is present in the equities market they are traded on. Until one of these factors changes, Canadian penny stocks will continue to be an investing segment that is worth paying attention to.

Vietnam,the emerging market ETFs

The thought of Vietnam brings up visuals of military carnage as seen on the nightly news of the 1960's. This is what Vietnam looks like today.

Yet, this small Southeast Asian country is still at war - with inflation. Nearing 20 percent, inflation crushed the Vietnamese economy in 2011. The Vietnamese government has recently taken strong and decisive action to curb inflation and return Vietnam to its previous prosperity.

Vietnam falls into the Emerging Markets sector. Two of the largest emerging market's ETF's Vanguard's (NYSEArca:VWO) and iShares (NYSEArca:EEM) do not list Vietnam among their top 10 holdings geographically. [Related: WisdomTree Emerging Market Small Cap ETF (NYSEArca:DGS), WisdomTree Emerging Markets ETF (NYSEArca:DEM)]

I have not found any Vietnamese stocks listed on the NYSE.

Market Vectors Vietnam ETF (NYSEArca:VNM) is the best way for investors to gain exposure to this truly emerging market.

VNM's holding are weighted in financials at 42.5 percent. Energy comprises 26.5 percent of this ETF with industrials 12 percent, materials 7.7 percent and consumer goods 9 percent. Although financials dominate, this is a diversified ETF and typical composition of an individual country index.

Average volume of 138K shares daily would not be considered heavy volume, but it is by no means illiquid or 'thinly traded'. What's important in the table is relative volume has traded at 2.4x the norm. Somebody is showing a lot of interest in Vietnam - rightly so. With 40 percent off the highs, VNM has a lot of room to move.

The Money Flow Index shows that buyers have come in strong after the December lows. Even more encouraging, the price has broken out of the descending wedge pattern and has made a higher high for the first time on the chart. The +/- Directional Index confirms that the bulls have made a decisive break out.

To test this price action as a true trend reversal, we need to see a pullback and support built. A pullback to $16 (the higher high breakout point) and recovery would be an ideal indication of a turnaround in Vietnam.

Catching a bounce at $16 to ride VNM up to its May 2011 highs would be nearly a 50 percent gain. Not bad for a "war torn" nation.

Under the World Trade Organisation (WTO)'s commitments, in 2012, Vietnam will allow securities companies and 100 percent foreign-invested fund management companies to operate in Vietnam.The first open-ended fund product with scale of 200-500 billion dong will be launched somewhere mid of 2012.

With its extremely cheap stocks on offer, Vietnam, rather than Indonesia, will be a great place to invest in this year, according to Forbes Magazine.

In an article recently published on Forbes Online, Peter Cohan recalls his visit to Singapore in January 2012 where he met with a hedge fund manager having invested in many Asian companies for years.

The hedge fund manager said that Indonesia used to be a great place to do business, but the best opportunity in the region in 2012 is to invest in Vietnam.

He studied the Vietnamese stock market and found 20 stocks with Price/Earnings (P/E) ratios of 2, cash flow growth of 14, and dividend yields of at least 12.

Cohan explained that a stock is cheap if its cash flow - the money left over after paying expenses - is growing faster than the P/E ratio.

A stock is a reasonable value if the ratio between a stock's P/E and its earnings growth or Price/Earnings to Growth (PEG) is 1.0 or below. By that measure, stocks in Vietnam are very cheap at 0.14 - dividing the P/E of 2 by the cash flow growth of 14.

In addition, Vietnamese stocks offer a very high dividend yield.

Their 12 percent yield is extremely high - particularly compared to the sub-1 percent rates that we are used to earning on our bank accounts, Cohan noted.

According to Cohan, the downward trend in the Vietnamese stock market in 2011 offers the chance for private equity investors to buy stakes in some of the country's biggest companies and the purchase is benefitting investors.

Cohan concluded that there are opportunities for businesses to invest in the banking, food and beverage industries in Vietnam, as its population increasingly moves from the lower to middle class income level and banks and food companies are willing to meet their demands.

Booming population face food crisis

The era of falling food prices has come to an end with the world population set to add another 2 billion people, according to Cargill Inc., the U.S. farm commodities trader.

The United Nations’ Food and Agriculture Organization has said global food output must rise 70 percent by 2050 to feed a world population expected to grow to 9 billion from 7 billion now and as increasingly wealthy consumers in developing economies eat more meat. Food prices tracked by the FAO climbed to the highest ever a year ago on surging grain prices.

“You don’t have to be a reviving bull on commodities to believe that the era, which went from the 50’s, 60’s to 70’s and early 80s, of ever decreasing food prices in real terms has probably come to an end,” Paul Conway, vice chairman of Cargill, said at the Kingsman sugar conference in Dubai yesterday. The conference is continuing through tomorrow when Jacob Robbins, managing director of global sweeteners at The Coca-Cola Co., are among the scheduled speakers.

The FAO food-price index averaged 228 points last year, 23 percent more than in 2010 and above the 200 points recorded in 2008, when food riots erupted from Haiti to Egypt. Prices since then have declined 11 percent by December.

Cargill, based in Minnesota, trades all kinds of farm commodities, including cocoa, soybeans, corn, sugar, meat, wheat and ethanol. Conway is based in Cobham, England. Wheat has doubled since the end of 2005, raw sugar is twice the price in December 2008 and orange juice climbed to a record last month.

Group of 20 farm ministers agreed to a plan last year in June to set limits on export bans and create a crop database to tackle what French President Nicolas Sarkozy called the “plague” of rising food prices.

As many as 925 million people already faced hunger worldwide in 2010, based on the FAO’s estimates. In response to the 2008 food price crisis, countries from India and Egypt to Vietnam and Indonesia banned exports of rice, a staple for half the world. Russia in 2010 banned cereal exports after the country’s worst drought in at least half a century destroyed crops and cut production, sparking a surge in grain prices across the world. Ukraine also restricted exports.

The desire to produce all the food needed locally is “complete nonsense,” Conway said. Export bans in 2008 were a consequence of the desire for self-sufficiency, he said. “That disrupted international trade and we believe exacerbated food price rises in that year,” he said.

The FAO’s index of 55 food items fell 2.4 percent to 210.99 points in December from 216.1 in November. The gauge slipped 4.1 percent in October, the biggest drop since March 2010, after rising to a record 237.9 in February. The January index is set for release on Feb. 9.

“The world’s farmers, some of the smartest businessmen that there are, can produce enough food to feed the next two billion people,” Conway said. “We are very confident about that. However, they need help.”

Burma's old debts

Burma owes $11 billion ($A10.4 billion) in sometimes-decades-old foreign debt and is negotiating with Japan and Italy to repay the outstanding sums, the finance minister says, disclosing the country's external debt for the first time in recent years.

Burma's economy was stunted for many years by mismanagement and by Western sanctions imposed as the long-ruling military failed to carry out democratic reforms. The military-backed but elected government that took office last year has pushed political and economic changes.

Finance minister Hla Tun told Parliament that as Burma makes reforms and expands its international relations, it has begun discussions on the debt with multilateral institutions and donor nations, including Japan and Italy.

He revealed the figures in Parliament on Tuesday, and politician Thein Nyunt recounted details to The Associated Press on Wednesday.

Hla Tun said $8.4 billion in debt dated from the socialist regime of the late general Ne Win between 1962-1988, and a $2.61 billion debt was incurred after a military junta took over in 1988, making a total of $11.023 billion.

He said the pre-1988 debt represented bilateral loans and borrowing from multilateral institutions that the government was unable to pay because loans and grants were stopped after the junta violently quashed a 1988 pro-democracy uprising. Available revenue at the time went into development projects.

The largest creditor before 1988 is Japan, with loans of $6.39 billion, he said, and the biggest post-1988 creditor is China with $2.13 billion.

Palm olein duty structure reform

Malaysia is drawing up an action plan, which will likely include reforms in its crude palm oil (CPO) export duty policy and a new fund estimated at over RM1bil, to assist local downstream players badly affected by Indonesia's palm oil export duty structure, sources said.

While the local CPO export duty has remained unchanged at 23% since the 1970s, Indonesia's CPO refined products export duties have been drastically slashed by more than half since October last year, and currently range from 3% to 20% .

Under the new duty structure, Indonesian palm oil refiners are expected to reap 5% to 8% higher profit margins compared with the traditional operating profit margins among Malaysian at 3% to 6%.

“The lower export duty means that the Indonesian refiners are able to offer refined palm products at very competitive prices compared with the local refiners which are getting higher priced CPO feedstock,” said a source close to the industry.

The Government is in the final stage of putting together appropriate measures for a rescue plan to help the RM6bil local palm oil downstream industry.

The Plantation Industries and Commodities Ministry, after meeting with parties concerned, had made two proposals the Industry Adjustment Fund (IAF) estimated at over RM1bil and a Fallback Plan for the oil palm companies, refiners, oleochemicals and biodiesel players.

The source pointed out that IAF, which would be generated from a new cess to be collected from upstream players, however, was met with strong opposition from the Malaysian Palm Oil Association and the Malaysian Estate Owners Association (MEOA).

This is in view of the plantation sector's existing list of taxes, cess, levy and export duty with total tax paid exceeding 46% annually or 20% more than the other sectors in the country.

The Fallback Plan on the other hand is generally supported by the local plantation players.

Among the measures are;

Maintaining the export duty on crude palm oil (CPO) and crude palm kernel oil (CPKO),

Lower duty on semi-finished palm oil products to prevent leakage,

Abolition of duty-free export quota for CPO and CPKO and

Indirect assistance to smallholders to offset any reduction in fresh fruit bunches (FFB) price.

According to an MEOA member, the association had conveyed its disagreement on IAF to the ministry in November last year.

He said that ME0A was generally positive on the Fallback Plan but sought changes to some of the measures proposed by the ministry.

The export duty of local CPO and CPKO must be lower than Indonesia but high enough to give Malaysian oil palm refineries a competitive edge against foreign refiners.

The proposed indirect assistance to smallholders to offset any reduction in FFB price must be given “only when the FFB price falls below RM400 per tonne,” he added.

In addition, the revenue generated from palm oil export and import duties must be utilised for the benefit of the palm oil industry such as funding for cooking oil subsidy with concurrent abolition of the Windfall Profit Levy.

Palm Oil Refiners Association (PORAM) CEO Mohamad Jaaffar Ahmad recently said oil palm refiners were badly hit by Indonesia's new tax structure.

There are 51 oil palm refineries in Malaysia and most of them are members of PORAM. Indonesia has reduced its export duty on RBD palm olein in bulk to 7% from 15% while the export duty on CPO is unchanged at 15%.

Previously, the price of Indonesian RBD palm olein FOB based on the 15% export tax was US$1,159 per tonne compared with US$1,162 per tonne from Malaysia.

However, the reduced tax at 7% would allow Indonesia's RBD palm olein to be sold at US$1,091 per tonne or at least US$71 cheaper than local RBD palm olein, added Jaaffar.

The total cost of processing/refining CPO into RBD palm olein among Indonesian refiners would also be lower by at least US$100 or at an estimated US$988 per tonne compared with local refiners.