KUALA LUMPUR (Feb 13): Plantation counters rose in afternoon trades on news of a 1.9% decline in palm oil inventory for January.
Palm oil stocks declined 1.9% to 2.58 million tonnes from December’s 2.63 million high, according to data released by the Malaysian Palm Oil Board (MPOB) at noon.
At 3.35 pm, the Kuala Lumpur Plantation Index rose 35.4 points or 0.45% to 7930.51 points, buoyed by big cap stocks such as Kuala Lumpur Kepong Bhd (KLK), IOI Corp Bhd, Kulim (Malaysia) Bhd and Tradewinds Plantations Bhd.
“Going forward we believe that inventory levels should be able to return to the 2 million tonne level in about three to four months given stronger demand,” Nur Nadia Kamil, a plantation analyst with MIDF Research, told theedgemalaysia.com over the telephone.
“We expect demand from China in the subsequent months to pick up as the country comes out of its winter period,” she said.
According to MPOB, crude palm oil inventory fell 0.96% month-on-month to 1.56 million tonnes in January. The lower inventory level bodes well for CPO prices which is currently in the RM2,400 per tonne region.
“Any good news in terms of CPO inventory and price is likely to directly impact plantation stocks. Stock performance is expected to pick up albeit at a slower pace, but plantation stocks are expected to be able to sustain this pick up in performance,” Nur Nadia said.
KLK was a top gainer, rising 32 sen or 1.5% to a high of RM21.62 on volumes of 134,300 shares. Batu Kawan Bhd, KLK’s largest shareholder with a 46.57% stake, gained 6 sen or 0.32% to RM18.28 on 29,400 share traded following an intra-day high of MR18.66.
IOI Corp gained 2 sen or 0.41% to RM4.87, peaking at RM4.90 earlier in the day while Tradewinds rose 4 sen or 0.92% to RM4.40 after reaching a high of RM4.41.
Kulim surged 3 sen or 0.83% to RM3.65 after hitting an intra-day high of RM3.68.