Friday, March 14 2003 - PLANTATION stocks, although rattled by prospectsthat current palm oil prices may have peaked, are still on solid ground asprices of the commodity are expected to remain firm in the next severalmonths.

Sectoral analysts said palm oil prices should be firm until at least thethird quarter of the year, before any decline sets in.

Crude palm oil (CPO) prices are expected to trend within RM1,400-RM1,550per tonne in the next six months, analysts said.

“It also depends on whether there will be war in Iraq, then prices couldgo even higher,” one analyst with a brokerage told Business Times in KualaLumpur yesterday.

An institutional dealer said clients are holding on to their plantationstocks as companies are expected to post improved earnings due to demandfor edible oils being higher than supply.

An analyst said although many plantation stocks are currently tradingbelow their book values, investors are keeping a cautious stance due touncertainties in the Gulf.

“IOI Corp is a good buy at below RM5,” the analyst said.

Selected plantation stocks eased slightly yesterday on selling pressure asinvestors nibbled at shares trading at a discount.

IOI Corp, which saw its share price drop by 2 per cent to RM4.90 onTuesday, rose 10 sen yesterday to finish at RM5 with 2.4 million unitstraded.

On Tuesday, IOI Corp was the top lagger on the Kuala Lumpur Stock Exchange(KLSE) Plantation Index when it pushed the index down by 7.5 points to1,713.7. The counter was also the day’s most active stock with over 8.8million shares worth RM43.2 million changing hands.

An analyst said IOI Corp has a large foreign shareholding of some 47 percent, which could account for part of the selling on Tuesday.

Besides IOI Corp, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhdwere among the stocks whose prices fell on Tuesday. Guthrie lost 4 sen oralmost 2 per cent to RM1.98 while Golden Hope fell by 2 sen or 0.7 percent to RM2.97.

Yesterday, however, IOI Corp was the biggest gainer in the KLSE PlantationIndex, followed by Guthrie which rose 6 sen or 3 per cent to RM2.04 withonly 1,000 units done.

Dealers said the overall bearish market sentiment will see volatiletrading continuing for all stocks.