Hot Stocks KLK, IJMPLNT fall in anticipation of plantation share correction

by **Cals** Mon 17 Mar 2014, 12:43

Hot Stocks KLK, IJMPLNT fall in anticipation of plantation share correction

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Monday, 17 March 2014 10:35

KUALA LUMPUR (Mar 17): Kuala Lumpur Kepong Bhd (KLK) and IJM Plantations Bhd fell as much as 2% and 2.5% respectively among top decliners after analysts said a corrrection was seen in shares of local plantation firms.
At 10.24am, KLK was traded at RM23.52 after falling as much as 46 sen to RM23.30.

IJM Plantations fell as much as nine sen to RM3.50 at 10.25am, its lowest price so far today.

Hong Leong Investment Bank Bhd analyst Nick Foo Mun Pang wrote in a note today that a correction was seen in the Kuala Lumpur Plantation Index.

This followed the index's recent gains in line with the rise in crude palm oil futures (FCPO) prices. Bloomberg data show that FCPO for May 2014 reached a one-year intraday high of RM2,916 a tonne last Tuesday (March 11, 2014) versus a low of RM2,191 on July 30, 2013.

Foo said : "Based on the above analysis, we are neutral with downside bias on the plantation outlook in near-intermediate term mainly due to the bearish views on plantation index and FCPO technical outlook.

"However, plantation sector could turn positive on palm oil price concern should a severe El Nino weather pattern takes place."

Meanwhile, Kenanga Investment Bank Bhd wrote in a note today that it had target prices of RM26.10 and RM3.80 for KLK and IJM Plantations shares respectively.

These come with "outperform" calls for both stocks, according to Kenanga.