PETALING JAYA: Rising crude palm oil (CPO) prices, which have hit a 13-year high, may have peaked as further upsides could be capped by increases in inventory levels.
Malaysia’s palm oil inventories rose to their highest level in four months in March, gaining 11% month-on-month to 1.45 million tonnes.
The growth, naturally, beat the consensus forecast. The benchmark palm oil futures closed up RM76 at RM3,726 per tonne yesterday.
TA Securities in a report yesterday said it remains cautious about a possible pullback in CPO prices in the second half of 2021. “However, we still expect the average CPO price for 2021 to be firmer and higher than 2020.
KUALA LUMPUR (March 5): Hong Leong Investment Bank (HLIB) Research maintains its neutral call on the plantation sector, as the research firm believes the current high crude palm oil (CPO) price will not sustain over the longer term.
In a note today, the research firm named its top picks, namely Hap Seng Plantations Holdings Bhd with a buy call and target price (TP) of RM2.17, IJM Plantations Bhd (buy, TP: RM2.29), and TSH Resources Bhd (buy, TP: RM1.35).
At the time of writing, shares of Hap Seng Plantations were up three sen or 1.61% to RM1.89, valuing the group at RM1.51 billion. Meanwhile, IJM Plantations was unchanged at RM1.82 with a market value of RM1.6 billion, while TSH Resources was up one sen or 0.95% to RM1.06, translating into a market capitalisation of RM1.46 billion.
WHY are plantation stocks not on the radar of investors even though crude palm oil (CPO) prices have gained as much as 18% from RM3,070 per tonne on Nov 3 last year to RM3,632 per tonne last Wednesday?
Analysts say there are several factors dampening prices, but warn that environmental, social and governance (ESG) issues that now plague the sector could be the most damaging if not swiftly addressed. This is because international investors are increasingly placing great value on such practices.
As Covid-19 vaccines are now available, investors have shifted their attention from glove makers and manufacturers of personal protective equipment to technology stocks, owing mainly to strong demand for semiconductors. The lack of interest in plantation stocks is palpable as reflected in the Bursa Malaysia plantation index.
KUALA LUMPUR (Feb 24): Hap Seng Plantations Holdings Bhd saw its net profit in the fourth quarter ended Dec 31, 2020 (4QFY20) increase by 47% quarter-on-quarter (q-o-q) to RM36.95 million from RM25.08 million. In a bourse filing, the planter said a combination of higher commodity prices and sales volume led to the increase. It noted that average selling prices for crude palm oil (CPO) and palm kernel (PK) were at RM3,148 per tonne and RM2,027.
KUALA LUMPUR (Feb 24): Based on corporate announcements and news flow today, companies in focus tomorrow (Feb 25) may include: Telekom Malaysia Bhd, VSTECS Bhd, Vitrox Corp Bhd, D&O Green Technologies Bhd, Rubberex Corp Bhd, Allianz Malaysia Bhd, Press Metal Aluminium Holdings Bhd, Inari Amertron Bhd, Aeon Co (M) Bhd, Genting Plantations Bhd, Parkson Holdings Bhd, DRB-Hicom Bhd, Hap Seng Plantations Holdings Bhd, Globetronics Technology Bhd, Dayang Enterprise Holdings Bhd, Datasonic Group Bhd, UOA Development Bhd, Prestar Resources Bhd, Tek Seng Holdings Bhd, Majuperak Holdings Bhd, AirAsia Group Bhd, Destini Bhd and LKL International Bhd.
Telekom Malaysia Bhd (TM) returned to the black in the fourth quarter ended Dec 31, 2020 (4QFY20) registering a net profit of RM259.44 million from a net loss of RM51.09 million recorded a year earlier due to lower operating costs and net other gains, the telco said. The improvement in its bottom line was despite the fact that TM saw its revenue f