MARKET DEVELOPMENT
IOI pauses share buyback as CPO rally lifts stocks
IOI pauses share buyback as CPO rally lifts stocks
15.02.2022 (www.theedgemarkets.com) - KUALA LUMPUR (Feb 15): IOI Corp Bhd has paused its months-long share-buyback activities amid the gradual rise in share prices on the back of the boom in crude palm oil (CPO) prices.
A bourse filing showed that IOI last purchased its own shares at the end of 2021, at prices of between RM3.59 and RM3.78, ending a buyback streak that had lasted since April 2021 where it bought back 50.7 million shares.
At noon market break, shares of the company traded up five sen or 1.21% to RM4.19 apiece, giving it a market capitalisation of RM26.33 billion.
The third largest Malaysia-listed plantation firm by market capitalisation had initiated share-buybacks last year as its share price fell to as low as RM3.59, hit by foreign sell-off over environmental, social and governance (ESG) risks in 2021 as well as pandemic-induced labour shortages, which overshadowed the phenomenal run of over 50% in CPO prices to record highs.
Investors are now returning to Malaysian plantation counters as CPO prices continue to scale new highs. On Feb 14, JP Morgan upgraded its call for local planters Kuala Lumpur Kepong Bhd (KLK), Genting Plantations Bhd and Sime Darby Plantation Bhd to ‘overweight’, as well as IOI to 'neutral'.
In 2021, KLK also initiated its maiden share buy-back activity — once in February and from June to August — involving a total of 47,700 shares which it bought at as low as RM18.52.
The counter was the biggest gainer across Bursa Malaysia at noon market break, settling up 62 sen or 2.55% to RM24.98 after touching a high of RM25.24 earlier.
April delivery of CPO rose to as high as RM5,689 per tonne at the time of writing, riding on news of India’s imports tax cut that could boost demand from the world’s biggest buyer.
At noon market break, Bursa Malaysia Plantation Index is the biggest gainer among Bursa Malaysia indices, rising 2.99% to 7,503.22 after gaining 3.12% earlier. The index is hovering at its one-year high.