Plantation stocks will continue to come under some pressure after the crude palm oil futures fell below RM2,000 in intra-day trade, the first time since March 31. It closed at RM2,001, down RM71. Oil closed at around US$60 on Nymex and this could stifle interest in oil and gas counters.
Among the decliners on July 8 were Far East Holdings, which fell 50 sen to RM5.70, IOI Corp six sen lower to RM4.60 and Sime Darby five sen to RM7.20.
The decline in CPO futures was linked to a fall in soybean while expectations of higher production would increase the stockpile and dampened prices.
IJM Plantations Bhd could see trading interest after it proposed a rights issue to raise about RM336.56 million which would involve a renounceable rights issue of 160.26 million new rights shares with 80.13 million new warrants.
This would be on the basis of two rights shares with one free warrant for every eight existing shares held at RM2.10 per rights share.
In Satang Holdings, a total of RM16.4 million was erased from its market capitalisation over the past two days when Bursa Malaysia Securities announced it would be suspended on July 13.
In Southern Acids, the board said the Shah Alam High Court had ordered the ex-parte order dated June 30, appointing interim receivers and managers over the company, has been suspended.
The suspension was pending the decision of the court on July 14 on the preliminary objections to the application to set aside the ex-parte Order.
On the outlook for the ringgit, CIMB Economics Research said a “strong” ringgit was good for Malaysia. It said a stable, strong and competitive real exchange rate, in co-ordination with enabling industrial and commercial policies can substantially improve prospects for economic development.
“Our contention is a “strong” ringgit bodes well for the overall economic transformation into a higher value added and high income growth economy,” it added.
Among the factors were that a stronger ringgit would lift consumer purchasing power; moving up the value chain; fear of eroding competitiveness is a myth and drive the services and manufacturing sectors into high value added activities.
It said a stronger local unit would help attract global talent and reverse “brain drain”; develop the financial market and finally, a pull factor for private capital flows.
“More critically, all macroeconomic policies – exchange rate, fiscal, monetary, and industrial policies are intertwined and need co-ordination to support overall development of the real economy,” it added.