16/08/2013 (Bernama) - Kenanga Research has maintained a "neutral" call on the plantation sector, while leaving its current calendar year 2013-2014 average crude palm oil (CPO) price forecast of between RM2,500-RM2,700 per metric tonne, unchanged.

In a research note today, the research house also posted "outperform" calls on IJM Plantation Bhd (TP:RM3.50), TSH Resources Bhd (TP:RM2.60), due to high fresh fruits branches growth potential.

At the same time, it maintained a "market perform" stance on Sime Darby Bhd (TP:RM9.80), IOI Corp Bhd (TP: RM5.40), Kuala Lumpur Kepong Bhd (TP: RM21.86), PPB Group Bhd (TP:RM15.20), Genting Plantation Bhd (TP:RM9.85), Felda Global Ventures Plantation (TP:RM4.60) and United Malacca Bhd (TP:RM7.55).

For the TAANN Group(TP:RM3.55) however, it maintained an "underperform" call due to the company's high cost issue.

According to Kenanga Research, Malaysia's palm oil inventory level of 1.66 million metric tonnes for June 2013, came in within market and its expectations of 1.65 million metric tonnes.

"Month-on-month inventory inched up only one per cent as the demand-supply equation remained in equilibrium in July.

"Looking ahead, we expect the August inventory to increase by five per cent month-on-month to 1.75 million metric tonnes.

"This should weaken CPO prices but not significantly, due to demand support from strong crude oil prices and a weak ringgit," it said.

Meanwhile, Hwang DBS said the current weakness in the palm oil price, reflects expectations of re-accumulation of stocks during the peak harvesting season in second half 2013.

"For this reason, we expect prices to remain weak for the remainder of the year," the research house added, in a separate note.