PublicInvest Research expects Malaysian plantation companies to post stronger earnings, owing to higher average prices of CPO. “In the fourth quarter of financial year 2020 (Q4), all plantation players except IOI Corp Bhd, Kuala Lumpur Kepong Bhd and Ta Ann Holdings Bhd will report stronger production on a yearly basis. Nevertheless, we believe the impact of weaker production would be offset by the stronger CPO prices .
KUALA LUMPUR: There has been a disparity between crude palm oil (CPO) prices and local plantation counters, which is possibly affected by the environmental, social and governance (ESG) criteria resulting in lower interest and valuation for the plantation sector.
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.
KUALA LUMPUR (Feb 4): Malaysia’s palm oil stocks likely grew 7.5% month-on-month (m-o-m) to 1.36 million tonnes (at end-January 2021) due to a slower decline in production compared to exports, said CGS-CIMB.
Its analyst Ivy Ng said findings of a survey of palm oil areas by the CGS-CIMB Futures team revealed that Malaysia’s crude palm oil (CPO) output probably fell 14% m-o-m or 2.1% year-on-year (y-o-y) to 1.15 million tonnes in January 2021.
Meanwhile, palm oil exports likely fell 35% m-o-m and 13% y-o-y, based on export statistics by cargo surveyors Intertek Testing Services (ITS) (-37.2% m-o-m), AmSpec Malaysia (-36.4% m-o-m) and SGS (-32.07%).
Ng estimated that Malaysia’s palm oil inventory had probably grown 7.5% m-o-m but declined 22.5% y-o-y to 1.36 million tonnes at end-January 2021.
WITH the overnight policy rate (OPR) at a record low of 1.75% and with most economists pricing in another 25 basis point cut to 1.5% in the first quarter, savers with a higher tolerance for risk may opt for other alternatives for returns on their savings.
One option would be to invest in stocks that offer dividend yields of at least 4% or more, which is much higher than the prevailing fixed deposit rate of 1.75% to 2% offered by most banks.
“Dividend-yielding stocks are evergreen stocks as long as they keep paying. If you are buying [a stock] for dividend yields, then you should not expect too much from capital appreciation.
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.