Hot Stocks Palm oil stocks fall after bearish remarks by Mistry

Hot Stocks Palm oil stocks fall after bearish remarks by Mistry
Business & Markets 2013
Written by Cynthia Blemin of theedgemalaysia.com
Friday, 13 September 2013 14:53

KUALA LUMPUR (Sept 13): Shares of major palm oil players fell, with one slumping as much as 2.87% today, after a bearish projection on crude palm oil (CPO) prices by an industry expert.

Yesterday, Godrej International Ltd director Dorab Mistry said palm oil may extend a decline as supply of this vegetable oil climbs and biodiesel demand peaks, according to reports by Bloomberg and Reuters.

Mistry said a rally in futures since the end of July was over and prices would drop from now. He noted prices rebounded 9.5% from a three-year low of RM2,137 a tonne in July as the spread between palm and gas oil created demand for biodiesel.

Two PLANTATION [] stocks, Genting Plantations Bhd and PPB GROUP BHD [], were among the top losers.

At lunch break, Genting Plantations fell as much as 2.87% to RM9.81 and PPB Group lost 1% to trade at RM14.28.

Other major players that recorded a dip in share prices included IOI CORPORATION BHD [], which fell by 0.18% or 1 sen, and KUALA LUMPUR KEPONG BHD [] dipped 0.45% or 10 sen.

UNITED PLANTATIONS BHD [] fell 0.15% or 4 sen and SARAWAK OIL PALMS BHD [] gave up 0.18% or 1 sen while SIME DARBY BHD [] lost 0.11% or 1 sen.

Affin Investment Bank analysts Ong Keng Wee said in a note today that Dhorab Mistry’s bearish expectation of CPO prices had impacted the market.

Alliance Research analyst Arhnue Tan told theedgemalaysia.com that plantation counters have not been a favourite pick for the year due to the unfavourable CPO prices.

But the drop in the share price of Genting Plantations could due to profit taking, she said, as the stock used to trade below RM8 in January this year.