KUALA LUMPUR (May 15): Shares in Felda Global Ventures Holdings Bhd rose by as high as 13 sen or 7.2%, after it announced a plan to dispose a 30% stake in a non-core chemical products firm, Taiko Clay Chemicals Sdn Bhd.

At 12:21pm, FGV shares have pared down its gain by 4 sen and was trading at RM1.89, with 20.68 million shares done. This values FGV, the world’s largest crude palm oil producer, at a market capitalisation of RM6.89 billion.

“The sale of non core asset should improve FGV management focus on its core businesses which include plantation, sugar and logistics,” Alan Lim, an analyst with MIDF Amanah Investment Bank Bhd, said in a note to clients today.

According to Hong Leong Investment Bank Bhd analyst Chye Wen Fei, FGV’s latest move is in line with its strategy to focus on improving its core business performance and strategic divestment of non-core assets.

FGV considers the stake disposal as a good opportunity to monetise its investment in Taiko Clay Chemical, which is understood to embark an overseas expansion and “will likely require additional capital injections from its shareholders”, Chye added.

Yesterday, FGV announced that its 72%-owned subsidiary Felda Palm Industries Sdn Bhd had proposed to divest its 30% stake in Taiko Clay Chemicals for RM145 million.

In a regulatory filing, FGV said it expects to net a disposal gain of RM16.1 million and expects to conclude the stake sale in the second half of 2018.

Separately, MIDF said the next key event to watch for, will be FGV’s quarterly earnings for the three months' period ended March 31, 2018 (1QFY18), which will be released by end-May.