At 0316 GMT, shares of Golden Agri-Resources (GAGR.SI) gained 2.5%, Indofood Agri Resources (IFAR.SI) rose 3.2% and First Resources (FRLD.SI) added 1.9%.
Asian plantation stocks, including those in Singapore, lack catalysts to head higher over next 12 months as industry fundamentals not supportive, says Macquarie, according to Dow Jones.
Macquarie says CPO prices may face pressure given record soybean inventories (palm oil is substitute for soybean oil), narrow price discount between CPO and soy oil, increased CPO inventories due to seasonal recovery in production.
Singapore plantation stocks, which outperformed rest of market yesterday, are notably lower today as investors pocket gains amid uncertainty over outlook for crude palm oil prices.
“We continue to believe that CPO price is unlikely to stay above MYR3,000 per ton for long, as inflation worries may prompt the governments of China and India to release their stockpiles,” says CIMB.
Singapore plantation shares are up, but with gains and volumes less robust compared to past week’s performance, suggesting investors are hesitant about chasing prices higher without fresh leads in sight.
Stocks like Golden Agri-Resources (E5H.SG) gained as much as 8.3% this week, 28.4% since start of 2010 on expectations of firm CPO prices and robust demand for cooking oil, related palm products amid global weather woes, with China’s recent data showing 56% on-year jump in commodity-driven imports for December latest buying trigger.
Weekend Comment Oct 15: Play the plantation laggard
“It is quite possible that current conditions lead to a repeat of the commodity price-driven phony inflation scare world markets last experienced in 2007 and early 2008,” Wood writes.
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