Friday 29 Mar 2024
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KUALA LUMPUR (Jan 9): Malaysian shares may take the cue from firmer crude palm oil (CPO) prices, which could direct the spotlight on plantation companies.

Plantation entities, with substantial upstream operations like Sime Darby Bhd and IOI Corp Bhd, might see investor interest as CPO prices gained. This is in anticipation of lower CPO supply following the massive flood in oil palm growing states here.

Malaysian CPO is also seen as a beneficiary of a weaker ringgit versus the US dollar. This is because a weaker ringgit prices the commodity more attractively in global markets.

Yesterday, local CPO for March 2015 rose to RM2,369 a tonne. This compared to RM2,095 in August 2014.

Reuters reported that Malaysian palm oil futures rose for a third day to hit a near six-month high on Thursday, on fears that supplies of the tropical oil will be further tightened by another round of monsoon rains in the no.2 grower.

The Malaysian Meteorological Department raised its weather warning on Thursday to an "orange stage" from a "yellow stage", and forecast Johor, Pahang, Terengganu and Kelantan
to receive heavy rains until the end of the week.
    
Yesterday, the FBM KLCI rose 18.88 points or 1.1% to close at 1,728.06. The ringgit was traded at RM3.5665 versus the US dollar.

AllianceDBS Research Sdn Bhd wrote in a note its stock market analysis showed buying power was stronger than selling pressure. "As such, FBMKLCI would likely trade above the 1,730.18 level on 9 Jan 2015,"  AllianceDBS said.

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