KUALA LUMPUR (Jan 23): Plantation counters were amongst the top gainers across the stock exchange in early trades this morning after being sold down heavily recently and possibly due to news on tight supply of soybean oil.
In the past two days, the stock market lost some 50 points or 3% after local and foreign institutional funds sold down their holdings on election jitters ahead of the general election which must be held by April 27.
According to a Reuters report yesterday, dryness in parts of Argentina and Brazil could hurt South America's soybean yields and turn buyers towards palm oil, currently trading at a discount of more than $300 a tonne.
Kuala Lumpur Kepong (KLK) Bhd, which has suffered three weeks of selling due to overvaluation and negative outlook for palm oil, was trading at RM21.90 at 10.37am, up 20 sen or 0.9% with 127,400 shares done. It hit a high of RM22.10 earlier.
But its related company Batu Kawan Bhd was untraded at RM18.42.
At 10.35 am, Sarawak Oil Palms Bhd was trading at RM5.62, up 1 sen or 0.2%, having hit a high of RM5.63 earlier, on a volume of 22,500 shares.
On SOP, OSK’s analyst Gan Jian Bo said in a note yesterday, “Refining margins widened as refiners shifted to a spot pricing for its crude palm oil (CPO) supply rather than the fixed price formula previously agreed upon with millers.
“Amid a seasonally strong CPO output and an environment of tight refining capacity, refining margins in Sarawak improved substantially in 4Q2012.”
The two integrated plantation companies, Sime Darby Bhd and PPB Group Bhd, also saw their shares rising.
Apart from value emerging after the sell-down, analysts had early this month considered them to be beneficiaries of Malaysia’s current palm oil export tax structure, implemented on Jan 1, 2013.
At mid-morning PPB Group, whose share price had fallen 5.68% in the past two days, rose 10 sen or 0.8% to RM12.38, from yesterday’s close of RM12.28.
Sime Darby was up 4 sen or 0.4% to RM9.26, with 1.31 million shares done, having hit a high of RM9.33 earlier.