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Affin IB Research downgrades plantation sector to Neutral

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Affin IB Research downgrades plantation sector to Neutral Empty Affin IB Research downgrades plantation sector to Neutral

Post by Cals Fri 05 Sep 2014, 21:32

Affin IB Research downgrades plantation sector to Neutral
Business & Markets 2014
Written by theedgemalaysia.com   
Friday, 05 September 2014 08:22

KUALA LUMPUR (Sept 5): Affin IB Research has downgraded the plantation sector to Neutral (from Overweight) and said crude palm oil (CPO) futures dipped below RM2,0000/MT after a series of bad news.
However, in a note Friday, the research house said it expects a price recovery, stronger in 2015 and 2016.
“Nevertheless, our previous 2015/16 forecast of RM2,850/MT looks ambitious now.
“We hence cut our CPO average selling price (ASP) assumption to RM2,600/MT in 2015 and RM2,700/MT in 2016/17,” it said.
Affin IB Research said following the cut in CPO ASP assumptions, it cut EPS forecasts and target prices for the plantation stocks under its coverage.
“With 3 Reduce, 4 Add and 1 Buy stock ratings, we downgrade the sector rating Overweight to Neutral.
“We continue to believe in the sector's bright long term prospects. Investors willing to look beyond 2H15 will see reasonable returns to investments. At current prices, our top picks for the sector are IJMP, KLK and SIME (which may soon list its Motor division).
“Timber stocks, Tan Ann and Jaya Tiasa's SOP-derived target prices have also been cut but stock ratings however remains unchanged at Buy and Reduce,” it said.
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