Saturday January 1, 2005 - A REPORT last Friday quoted Malaysian Palm OilPromotion Council chief executive officer Datuk Haron Siraj as saying thatcrude palm oil (CPO) prices might receive an immediate upward impact inthe next few weeks.

This was based on concerns of tight supply in Indonesia following thetsunami disaster. Indonesia is the world's second largest producer of palmoil after Malaysia. Both countries account for up to 80% of the world'spalm oil output.

And it is on the back of this tragedy that IOI Corp Bhd may stand tobenefit. This company does not have any plantations in Indonesia.

Recently, it was reported that IOI Corp might venture into Laos to groweither oil palm or rubber aon 100,000ha as part of its expansion plans.Even before the tsunami struck, a plantation analyst had been calling abuy on the stock based on the company's lower effective tax rate forfinancial years 2005 and 2006.

“IOI's effective tax rates are expected to be low for the next five yearsfrom financial year 2005 due to a tax incentive that allows the group toclaim tax rebates from its RM813.8mil acquisition of Loders Croklaan BV in2002,” says the analyst.

He has a target price of RM10.90 for the stock, which means a 15.34%upside from current levels. – By Tee Lin Say