KL palm oil stocks soar on rally and RI ban
KL palm oil stocks soar on rally and RI ban
KUALA LUMPUR (AFP): Listed plantation companies in Malaysia
are experiencing a windfall in share prices due to a rally on the
local bourse and Indonesia's plan to ban export of palm oil,
analysts said yesterday.
Plantation firms on the Kuala Lumpur Stock Exchange (KLSE)
dealing in palm oil have seen price hikes of up to 20 percent in
the last two weeks amid the bourse's bullishness and Jakarta's
proposal Tuesday to outlaw external sales of palm oil.
"The overall market rise has pushed up most commodity counters
while the Indonesian plan could have factored particularly into
palm oil stocks," said Tan Teng Boo, managing director of Capital
Dynamics, a Malaysian-based investment consulting firm.
The KLSE benchmark composite index, spurred by a return of
foreign funds and strong earnings by listed firms, has jumped
47.29 points, or nearly five percent in value, since July 28 to
close 1,073.59 on Wednesday.
While the surge only indicated gains by the 86 stocks weighted
on the index, brokers said certain commodity counters outside the
index had been posting handsome profits for punters.
Among the best bets in the last week were palm oil company
Sungei Bagan, which climbed 11.50 ringgit (US$4.6), and Negri
Sembilan Oil Palms, which perked 1.50 ringgit, since August 3, to
close at 82 ringgit and 8.90 ringgit, respectively, on Wednesday.
Jeram Kuantan, Malaysia's most expensive stock, was another
palm oil-based winner, surging 15 ringgit over the week to 130
ringgit.
"Although some rubber, coffee and tin-based counters are
facing erratic movements, palm oil stocks have been doing well,
helped partly by better prices for the commodity and the
Indonesian move," said a broker.
Indonesia
Indonesia's logistics bureau said Tuesday the proposed ban on
palm oil exports was necessary to arrest soaring domestic prices
of cooking oil which had reached Rp 1,500 (72 U.S. cents) a
kilogram from Rp 1,220 in December.
The bureau also proposed a tax scheme to curb palm oil sales
from Indonesia, the world's second largest palm oil producer with
a projected 3.89 million-tons export this year compared to the
7.5 million tons expected from Malaysia, the largest producer.
"Malaysia is already enjoying a nice slice of the global palm
oil cake, with China, Pakistan and India having cut back on
production and things could be more bullish if Indonesia proceeds
with the ban," said an analyst.
Price of Malaysian palm oil has risen to its highest level in
six years, with the commodity now fetching an average of 1,410
ringgit per ton against 1,260 ringgit in 1988, due to lower
output of edible oils worldwide.