KUALA LUMPUR: CIMB Equities Research is maintaining a Trading Buy on Malaysian PLANTATION [] sector.
It said on Thursday, Feb 18 that Malaysia’s palm oil stocks at end-Jan undershot its estimates due to stronger exports and weaker production.
Another 2% month-on-month drop to 1.96 million tonnes can be expected for the low production month of February.
CIMB Equities Research said abnormally low rainfall in Sabah and Johor, possibly due to El Nino, could impact palm oil yields in the second half of the year, leading to lower palm oil supplies.
"Both developments are positive for CPO price. We are maintaining our CPO price forecasts of RM2,380 for 2010 and RM2,450 for 2011," it said.
CIMB Equities Research said it continued to rate the Malaysian plantation sector a TRADING BUY as it has lagged behind regional plantation plays and prospects for CPO price remain favourable.
"Within the Malaysian plantation space, we continue to prefer planters with higher exposure to East Malaysian estates and attractive valuations, i.e. Sime Darby, Genting Plantations and Hap Seng Plantations," it added.
Its other picks in the region remain Golden Agri, Indofood Agri, Wilmar, Astra Agro, London Sumatra and Sampoerna Agro. The main potential re-rating catalysts for the sector are (1) a CPO price rally in 1Q10, (2) better earnings in the upcoming results season, and (3) potential M&As.
About Me
- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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