MARKET DEVELOPMENT
CIMB Research Remains Neutral on Plantations
CIMB Research Remains Neutral on Plantations
12/04/2014 (The Star) - CIMB Equities Research is retaining its Neutral stance on the plantations sector and projects crude palm oil (CPO) prices to trade between RM2,500 and RM2,800 per tonne.
It said on Friday Malaysia's palm oil stocks rose unexpectedly by 2% on-month at end-March for the first time since December 2013 to 1.69 million tonnes due mainly to stronger-than-expected recovery in palm oil output.
"This is 13% above our forecast and 7% higher than that of consensus, mainly due to stronger-than-expected production and weaker exports. The arrival of rains in the later part of March helped improve fresh fruit bunches (FFB) yields," it said.
CIMB Research said this was negative for CPO prices as it suggests that stocks are not as tight as expected. But the market is likely to remain vigilant on the supply prospects as weather experts have recently raised the probability of an El Nino event in 2H14 to more than 70%.
" We remain Neutral on the sector, with First Resources, Wilmar, Ta Ann, AALI, SIMP and LSIP as our top picks," it said.
It said on Friday Malaysia's palm oil stocks rose unexpectedly by 2% on-month at end-March for the first time since December 2013 to 1.69 million tonnes due mainly to stronger-than-expected recovery in palm oil output.
"This is 13% above our forecast and 7% higher than that of consensus, mainly due to stronger-than-expected production and weaker exports. The arrival of rains in the later part of March helped improve fresh fruit bunches (FFB) yields," it said.
CIMB Research said this was negative for CPO prices as it suggests that stocks are not as tight as expected. But the market is likely to remain vigilant on the supply prospects as weather experts have recently raised the probability of an El Nino event in 2H14 to more than 70%.
" We remain Neutral on the sector, with First Resources, Wilmar, Ta Ann, AALI, SIMP and LSIP as our top picks," it said.