27/07/2012 (The Star) - Plantation-based Sime Darby and KL Kepong dragged the FBM KLCI into the red at midday on Thursday on worries about expected decline in crude palm oil (CPO) prices.

Sentiment in plantation stocks was somewhat cautious after palm oil forecaster Dorab Mistry projected a decline in CPO prices as weakening demand outweighs a decline in Malaysian production.

Crude palm oil for third-month futures fell RM16 to RM2,935 at midday.

Bloomberg quoted Mistry, who is the director of Godrej International Ltd as saying futures might fall 7.9% to RM2,700 a ton by the end of the year, the lowest since October 2010, unless the U.S. does more to stimulate growth and boost demand.

At 12.30pm, the FBM KLCI was down 6.03 points or 0.37% to 1,629.06. Turnover was 563.21 million shares valued at RM680.29mil. Declining stocks beat advancers 338 to 244 while 309 counters were unchanged.

Among the key regional markets, Japan's Nikkei 225 rose 0.29% to 8,390.46; Hong Kong's Hang Seng Index edged up 0.05% to 18,887.55; Shanghai's Composite Index 0.2% higher at 2,140.50; Taiwan's Taiex added 0.39% to 7,006.55 and South Korea's Kospi 0.48% to 1,777.79 and Singapore's Straits Times Index climbed 0.89% to 3,017.47.

US light crude oil fell 45 cents to US$88.52 and Brent shed 0.51 sen to US$103.87. Spot gold rose 20 cents to US$1,604.05.

The ringgit was firmer against the US dollar at 3.1685.

Sime Darby fell eight sen to RM9.87, dragging the KLCI down 1.13 points, KLK fell 48 sen to RM23.68, shaving 0.8 of a point of the index. United Plantations lost 32 sen to RM25.18 and PPB Group four sen to RM15.44.

BAT was the top loser, down 72 sen to RM60.28, UMW 22 sen to RM9.60, Shell and MISC 11 sen lower at RM9.25 and RM4.49. Genting lost 11 sen to RM9.16.

IHH was the most active with 37.17 million shares done, up seven sen to RM3.16.

Banks rose at midday, with Hong Leong Bank adding four sen tio RM13.44 and Public Bank two sen to RM14.38.

F&N and Old Town rose 10 sen each to RM18.54 and RM1.88 while CMSB edged up six sen to RM2.88.

UOA Devt also added six sen to RM1.63. CIMB Equities Research raised the target price to RM2.18. It said UOA Dev, with year-to-date new sales of over RM1.1bil, it has exceeded its full-year target of RM1bil.