KUALA LUMPUR (March 9): Most plantation stocks were in the red as at mid-morning, declining in line with the broader market selldown, as investors pulled out of emerging market equities amid fears of the Covid-19 outbreak.

Crude palm oil futures are currently down 9.9% at RM2,209 per MT versus RM2,450 per MT as at last Friday.

Among the decliners were IOI Corp Bhd (down 6.73% at RM3.88), Kuala Lumpur Kepong Bhd (down 4.31% at RM20.86), Genting Plantations Bhd (down 3.06% at RM9.50) and IJM Plantations Bhd (down 7.41% at RM1.50) at 10.39am.

Several players saw double-digit percentage declines today as well, such as Ta Ann Holdings Bhd (down 10%), TH Plantations Bhd (down 11.76%) and TSH Resources Bhd (down 12.28%).

The selldown in plantation stocks was in line with the plunge in the FBM KLCI, as the benchmark index posted a 51.20-point drop to 1,431.90 at the time of writing.

The Bursa Malaysia Plantation Index declined 33.73 points or 0.5% to 6,733.04 points. Over the past year, the index has declined 7.31%.

Reuters said investors fled to bonds to hedge the economic shock of Covid-19, while prices of crude oil plunged after Saudi Arabia cut its official selling price.

Besides the disease outbreak and crude oil prices, the FBM KLCI is also plagued by uncertainties surrounding Prime Minister Tan Sri Muhyiddin Yassin’s Cabinet line-up, which will be announced later today.

Hong Leong Investment Bank Bhd noted that the implementation of the stimulus package that was announced by the government may be in question as well, given the decline in crude oil prices to around US$33.77 per barrel at the time of writing versus the US$62 per barrel assumption by the Ministry of Finance.