Plantation stocks rise after CPO price rose past RM4,700 per tonne

Plantation stocks rise after CPO price rose past RM4,700 per tonne
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KUALA LUMPUR (May 7): Shares of oil palm growers rose this morning after crude palm oil (CPO) price surged past RM4,700 per ton yesterday.

Bernama reported the CPO futures contract on Bursa Malaysia Derivatives closed higher yesterday, boosted by the stronger soybean oil performance on the US Chicago Board of Trade.

CPO futures contracts for May 2021 increased RM120 to RM4,718 per ton. Meanwhile, futures for June 2021 rose RM148 to RM4,459 per ton, whereas July 2021 rose RM171 to RM4,215 per ton, and August 2021 climbed RM183 to RM4,033 per ton, according to Bernama.

Bursa Malaysia's plantation index rose 0.51% to 7,027.91 at the time of writing.    

At 11.29am, Kuala Lumpur Kepong Bhd (KLK) increased by 10 sen or 0.45% to RM22.30; IJM Plantations Bhd gained four sen or 2.14% to RM1.91; Boustead Plantations Bhd rose two sen or 3.2% to 64.5 sen; Sarawak Oil Palms Bhd grew two sen or 0.5% to RM4.02; TSH Resources Bhd went up four sen or 3.54% to RM1.17; TH Plantations Bhd climbed 1.5 sen or 2.83% to 54.5 sen.

Maybank Investment Bank Research’s analyst Ong Chee Ting said in a note yesterday he is positive on the plantation sector amid high CPO prices.

“At current CPO spot price of about RM4,500 per ton, the bottom line benefits to the planters are asymmetrical mainly due Indonesia’s CPO export tax structure for some, and for others, forward sales engaged earlier.

“4Q20’s CPO average selling price achieved by planters serves as a good reference for key beneficiaries of current price upcycle, namely Boustead Plantations, Sarawak Oil Palms, Ta Ann Holdings Bhd, and IOI Corp Bhd,” he said.

Meanwhile, his top picks are KLK, Sarawak Oil Palms and Boustead Plantations.

Lam Jian Wyn