Hot Stocks United Plantations, BLD, IJMPLNT top decliners on Indonesia plantation bill

by **Cals** Thu 02 Oct 2014, 02:24

Hot Stocks United Plantations, BLD, IJMPLNT top decliners on Indonesia plantation bill

Business & Markets 2014

Written by Supriya Surendran of theedgemalaysia.com

Wednesday, 01 October 2014 11:25

KUALA LUMPUR (Oct 1): Plantation counters like United Plantations Bhd, BLD Plantations Bhd and IJM Plantations Bhd fell among Bursa Malaysia top decliners on news Indonesia has passed a new plantation bill.

The bill allows the central government to limit direct foreign investment, based on crop type, size of the producing company, and certain geographical conditions.

At 10.52am today, United Plantations fell 60 sen or 2.25% to RM26.08 while BLD Plantations Bhd declined 30 sen or 3.7% to RM7.80.

IJM Plantations fell 23 sen or 6.3% to RM3.42.

Kenanga Investment Bank Bhd maintained its "neutral" stance on the plantation sector in its research report today. Kenanga said it believed the news was unlikely to affect crude palm oil prices in the near term.

“We believe that Malaysian planters are likely to take a wait and see attitude to understand the policy before commiting to higher planting in Indonesia,” said Kenanga.

Public Investment Bank said in its research report that although the Indonesian government could still impose limitations on foreign investment, the research house believed it was highly unlikely to happen under Indonesia’s newly-elected President Joko Widodo's administration.

Widodo will assume office this October 20.

“Big plantation players like Genting Plantations Bhd, IJM Plantations Bhd, Kuala Lumpur Kepong Bhd, Sime Darby Bhd and TSH Resources Bhd would have been adversely affected if the Indonesian government had decided to cap foreign ownership as they have high exposures in the country,” said Public Investment.

Public Investment also maintained a "neutral" stance on the plantation sector.