PETALING JAYA: Premised on expectations that crude palm oil (CPO) prices will decline, one research house is advocating building positions in integrated plantation players such as Kuala Lumpur Kepong Bhd (KLK) and IOI Corp Bhd.
.
“The upcoming results season is expected to usher in re-rating catalysts in the form of strong quarter on quarter earnings growth or fat dividends for all of these stocks except Sunway, ” UOB added. has been a significant laggard and should appeal to longer-term investors.
Meanwhile, in its report to clients yesterday, Hong Leong Investment Bank Research (HLIB Research) said on the whole, the Permai stimulus which was announced on Monday, “seems to be largely targeted at both the rakyat and SMEs that have been hit by the negative ramifications of Covid-19.”
“From a market perspective, our sense is that the stimulus initiatives were largely reiterations of previously announced ones, ” it said.
KUALA LUMPUR (Jan 12): After Malaysia’s crude palm oil (CPO) inventory declined to a three-and-a-half-year low of 1.26 million tonnes in December 2020 from 1.56 million tonnes in November, analysts believe a seasonal production uptick, coupled with weaker export demand, will help replenish stocks and consequently drive prices down.
In a note, MIDF Research projected CPO prices will continue to increase in the first quarter of 2021 (1Q21) on the back of anticipated supply tightness and higher export demand. However, it presumes CPO prices will soften in the second half of this year (2H21) due to better production levels and lower export demand.
It set its CPO target price at RM2,700 level per tonne this year and maintained its “neutral” stance on the sector.
KUALA LUMPUR (Jan 6): Malaysia’s palm oil inventory likely fell 23% month-on-month (m-o-m) and 40% year-on-year (y-o-y) to 1.21 million tonnes at end-December 2020 the lowest stock level since June 2007, due to higher exports and declining output, a survey by the CGS-CIMB Futures team showed.
The survey also revealed that Malaysia’s crude palm oil (CPO) output probably fell 11.1% m-o-m (-1% y-o-y) to 1.33 million tonnes in December 2020.
“We believe the lower production could be due to worker shortage issues caused by the current freeze on foreign worker permits and seasonality factors as well as some disruptions in harvesting and evacuation due to heavier-than-usual rainfall caused by La Nina in some parts of the country,” it said.