KUALA LUMPUR(Oct 3):Plantation stocks edged up marginally later Friday morning after Kenanga Investment Bank Berhad maintained its “neutral” call for the plantation sector and said it estimates that the crude palm oil prices(CPO) will recover in the near-term.

Alan Lim Seong Chun from Kenanga said he expected that the CPO prices to recover to an average of RM2500 per metric tonne in 4QCY14 because the soybean oil prices have bottomed and palm oil inventory have peaked in August.

Lim said he had reduced its inventory estimate by 8% to 2.03m MT for palm oil stock in Malaysia due to weaker-than-expect production in September and it is likely to see a lower production in 4QCY14, while the demand will have a growth of 16% MoM to 1.67million MT.

Overall, lower inventory should be positive to CPO prices as it reflects higher demand against supply, he said.

“Despite the optimism seen for CPO prices, the upside is limited for planters as the upcoming 3QCY14 results season is likely to see YoY decline. Lastly, most planters have only managed to meet consensus earnings expectations for 2QCY14,” Lim said.

Lim maintains “Market Perform” on IOI Corp (TP: RM5.30), KLK (TP: RM23.80), FGV (TP: RM4.00), PPB (TP: RM15.00), TSH (RM3.40), TAANN (TP: RM4.55), UMCCA (TP: RM7.15) and CBIP (RM4.85) while maintaining “underperform” on Genting Plantations (TP: RM9.55) and IJM Plantations (TP: RM3.50).

On Friday, a few plantation stocks including Genting Plantation, Felda Global Venture(FGV), Kuala Lumpur Kepong Berhad(KLK) Pinehill Pacific Berhad(PBB) , Dutaland Berhad rose marginally.

Genting Plantation rose 3 sen or 3% to RM9.92 with 2,400 units changing hand. Genting Plantation has market capitalization of RM7.61billion.

FGV increased 6 sen or 1.73% to RM3.53 with 243,200 shares done. FGV’s market capitalization amounted to RM12.88billion.

KLK also rose 2 sen to RM21.46 with 10,100 shares done. The planter has market capitalization of RM22.60billion.

Other planter PPB’s price also rose 0.5sen or 1.3% to RM3.90 with 83,000 shares done. PPB has market capitalization of RM57.67million.

Meanwhile, Dutaland, the most active counter among all the plantation stocks, rose 1 sen or 1.34% to 75.5sen with some 2.25million shares done.

Dutaland has a market capitalization of RM638.90million.