Plantation stocks have been battered-down, is it a good time to buy now?

By Star Online: Business
25th Jan 2013

PETALING JAYA: Having been battered down since last September, is it a good time for investors to buy into plantation stocks?

Over the last 12 months, the plantation index of Bursa Malaysia has underperformed the benchmark FTSE Bursa Malaysia KL Composite Index (FBM KLCI) significantly. To-date, the plantation index is some 15% below the FBM KLCI.

This is not surprising, considering that the third-month contract of crude palm oil (CPO) prices have been taking a beating since September, dipping 19.26% to around RM2,481 per tonne on Jan 23.

The CPO price decline is basically due to higher inventories and weaker demand.

Indonesia's wage hike will hurt Malaysian planters

By Star Online: Business
27th Nov 2012

" Indonesia's rapid increase in minimum wages will continue to erode Malaysia's attractiveness as an employment destination for foreign workers. "

PLANTATION SECTOR - Impact of new export tax rate system

By AmResearch
15 October 2012


Positive for Sabah upstream players. We believe that the export tax structure to be implemented on 1 January 2013 would give upstream plantation players more avenues to sell their CPO products. They would not have to depend on the local refiners to buy their products.

Plantation - Feeling the pain without the tax free quota

By Kenanga Research
15 October 2012


The Malaysia Ministry of Plantation Industries and  Commodities (MPIC) has decided to cut the CPO export tax and scrap the CPO tax free quota from 1-Jan-2013 onwards. The new CPO export tax will be between 4.5%-8.5%, to be determined on a monthly basis. In order to increase bio-diesel usage by 0.3m mt, the B10 Program has been suggested for the unsubsidised sector. We believe that the news is overall negative to the Malaysian upstream players due to the expected lower net Average Selling Prices (ASP) realised for CPO. However, this will benefit Malaysian downstream players due to better margin from the lower CPO feedstock cost. The B10 Program is commendable and should provide a lift to international CPO prices by ~RM150/mt if the program is implemented successfully and reduces the inventory level by 0.3m mt. The overall impact is positive to big cap planters with significant downstream exposure in Malaysia such as IOICORP, SIME, KLK and FGVH. However, pure upstream players who are likely to suffer lower earnings are GENP, IJMP, TSH, UMCCA and TAANN. We are maintaining our CPO price estimates of RM2,975-RM3,000 per mt for CY12-CY13. However, our existing calls and Target Prices (see  page 2) for planters are currently UNDER REVIEW with a high chance of Target Prices being cut for the pure upstream players but minimal changes for the big cap planters.

Value Growth Investing

By KCLAU (kclau.com)
15 Aug 2012

A friend asked why I am still in the stock market when there are so much of uncertainties. Both the United States and Europe have so much of financial difficulties and unemployment, India’s Rupee is at historical low and China has lower GDP growth. Under such conditions, how can you still expect to make money from the stock market?

In fact, this is the best buying opportunity to pick up undervalued growth stocks when most fund managers and investors would reduce their holdings -be a contrarian investor.