MARKET DEVELOPMENT
CIMB Research Maintains Neutral on Plantations
CIMB Research Maintains Neutral on Plantations
11/06/2013 (The Star) - CIMB Equities Research is maintaining its Neutral recommendation on the plantation sector and its key picks are First Resources, Wilmar and IOI Corp.
It said on Tueday Malaysia's palm oil stocks continued to fall (down 5% on-month) to reach an 11-month low of 1.82 million tonnes at end-May.
"This is below our forecast of 1.92 million, but above consensus estimate of 1.78 million tonnes. While lower stocks are positive, we feel this has already been partially priced in," it said.
CIMB Research said stocks should fall further in June on slower output growth, matched with robust festive demand for Ramadan.
"These, coupled with positive export data for the first 10 days of June and a poor start to the US soybean planting season, are price supportive factors.
"Our average crude palm oil (CPO) price forecasts of RM2,530 for 2013 and RM2,700 for 2014 and Neutral sector call stay unchanged," said the research house.
It said on Tueday Malaysia's palm oil stocks continued to fall (down 5% on-month) to reach an 11-month low of 1.82 million tonnes at end-May.
"This is below our forecast of 1.92 million, but above consensus estimate of 1.78 million tonnes. While lower stocks are positive, we feel this has already been partially priced in," it said.
CIMB Research said stocks should fall further in June on slower output growth, matched with robust festive demand for Ramadan.
"These, coupled with positive export data for the first 10 days of June and a poor start to the US soybean planting season, are price supportive factors.
"Our average crude palm oil (CPO) price forecasts of RM2,530 for 2013 and RM2,700 for 2014 and Neutral sector call stay unchanged," said the research house.