28/03/2012 (Business Times) - Kenanga Research upgraded Malaysia’s plantation sector to "overweight", expecting the total return of the sector to record more than 10 percent on positive demand and supply fundamentals.

“Resilient crude palm oil (CPO) demand from Asia should continue into the second quarter of this year, supporting our bullish view on CPO prices,” the broker said in a research note on Tuesday.

Kenanga Research expected lower soybean oil supply from South America to boost CPO demand and prices as the commodity was commonly used as a substitute.

“Given the better outlook on CPO prices, we have applied higher forward price-to-earnings ratios ... for most planters under our coverage,” it said.