Banks, planters shine last year

By Jeeva Arulampalam
Published: 2010/01/01

However, the best-performing FBM KLCI member of 2009 was MMC Corp which saw its stock price surge 133.65 per cent from a year ago


Banking and plantation stocks on the benchmark index were the best performers last year as investors bet they would benefit from a rebounding economy and the rising price of crude palm oil (CPO).

The FTSE Bursa Malaysia KLCI closed at 1,272.78, up 1.66 points yesterday, the last trading day for 2009, with a turnover of 602.4 million shares valued at RM842.716 million.

The key index gained 45.2 per cent for the whole of last year, quickly rebounding from a 40 per cent fall in 2008.

OSK Investment Research said that banking stocks performed well last year as recovery in the capital market was ahead of expectation and local banks were not too troubled by loan recovery.



"The banks' non-performing loans were below people's expectation. Also, strong growth in Indonesia for banks like CIMB bode well," OSK head of research Chris Eng told Business Times yesterday.

Eng remains bullish on banking stocks for this year as their earnings benefit from higher interest rates.

The country's second largest bank, CIMB Group Holdings Bhd, led gainers in the banking sector, with its share price more than doubling in a year to end at RM12.84 yesterday.

Its share price hit a record high of RM13.28 on November 16 on news that the banking group was planning a dual listing in Thailand this year.

Meanwhile, plantation stocks also did well as the price of CPO rose from a lower base at the start of last year.

CPO price on the futures market as of yesterday was RM2,658 compared with RM1,744 a year ago.

A plantation analyst also said that demand for palm oil grew as crops were destroyed in a draught in Latin America.

Planter Kuala Lumpur Kepong Bhd saw its share price increase the most last year, some 85.39 per cent to end at RM16.50.

The best-performing index member of 2009 was MMC Corp Bhd, an operator of ports and power plants, which saw its stock price surge 133.65 per cent from a year ago.

The share ended at RM2.43 yesterday, having recovered from the hammering experienced in 2008 due to concern over its related-party deal to buy airport operator Senai Airport Terminal Services Sdn Bhd (SATS).

The announcement, made in August 2008, was followed by plans to sell a minority stake in its subsidiary, Port of Tanjung Pelepas, in December 2008 to help finance the SATS purchase.

The stock hit a low of 95.5 sen on December 17 2008 before recovering slightly to end 2008 at RM1.04.

"While investors were fed up with the related-party deal, they have realised that the group's asset remains intact. MMC is an asset play; it is value-yielding in a longer term," Eng said.

The worst-performing index member was British American Tobacco (Malaysia) Bhd. Its share price fell almost 4 per cent through the year to end at RM42.80.

"Dividend-yielding stocks didn't do so good this year. However, the cigarette boys continue to face problems with high illicit trade in the industry," said Eng.

Tobacco companies were also impacted by the government's decision to raise the tobacco excise duty by 1 sen per stick to 19 sen in October.