(Feb 25): Malaysia, a net exporter of crude oil and the world’s No. 2 palm oil producer, stands to gain from the record-smashing gains in global commodity markets sparked by Russia’s invasion of Ukraine, analysts said.
While the conflict has pushed Brent oil past US$100 (about RM420) a barrel, palm oil topped RM6,000 a ton for the first time ever on Thursday (Feb 24) to extend a record-breaking run fuelled by smaller output in the Southeast Asian nation.
MIDF Research reaffirmed its bullish calls on the energy and plantation sectors, while TA Securities said a decline in local stocks would be a buying opportunity. The FBM KLCI has risen more than 5% so far in February, poised for its best month since August, amid optimism about the nation’s wide Covid-19 vaccine coverage and plans to reopen its borders.
“The attack on Ukraine won’t derail the current economic and corporate earnings recovery” in Malaysia, TA Securities said. The firm asked clients to accumulate as the KLCI enjoys strong support at the 1,500 level. MIDF, on the other hand, kept its end-2022 target unchanged at 1,700 points.
The gauge climbed 1.1% to 1,591.72 at the close on Friday, with the index of palm oil stocks ending near its highest level since January 2018. Kuala Lumpur Kepong Bhd (KLK) rose as much 1.9%, while IOI Corp Bhd jumped as much as 4.2%.
Oil and gas services firms also climbed on Friday. Dialog Group Bhd gained as much as 2.5%, followed by Sapura Energy Bhd at 12.5%, Petronas Chemicals Group Bhd (PetChem) 2.9% and MISC Bhd 2.9%.