Friday 29 Mar 2024
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KUALA LUMPUR: The third-month crude palm oil (CPO) futures rose to its highest since September last year to RM2,484 per tonne in late afternoon trade on April 23.

CPO rose RM9 to RM2,484 at 3.20pm. The KL Composite Index added 6.02 points to 974.6.

Plantation stocks also rode on the firm CPO futures, as investors expected Russia to buy more vegetable oil, including palm oil before the imposition of higher import duties on June 1.

KL Kepong rose 20 sen to RM11.40 with 1.55 million shares done while Kulim also added 20 sen to RM5.50 and BLD Plantations gained 12 sen to RM3. Kulim-WB rose 14 sen to RM2.98.

Meanwhile, AmResearch maintained its Buy call on KL Kepong with an unchanged realised net asset value-based fair value of RM12.60 a share, based mainly on a CY09F's price to earnings of 15 times in plantation earnings.

"Despite KLK's more grounded view on CPO prices after our recent company visit, we are keeping our earnings forecast and Buy recommendation. View of the recent run-up in price of CPO is that it may have been a tad too fast and as such, the rally might not be sustainable," it said..

The research house said despite this, at worst, CPO prices were expected to range between RM2,200 a tonne to RM2,300 a tonne, which was still decent.

"Operations-wise, KLK's cash operating costs (excluding palm kernel) are currently between RM930 per tonne to RM940 per tonne," it said.

AmResearch said fertiliser costs were holding up quite well and there was a possibility that it could rise going forward.

 

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