The CPO price and stock disconnect

SINCE the start of the year, the plantation sector, as measured by the Kuala Lumpur Plantation Index (KLPI), has underperformed the FBM KLCI by 8.4%, as the former is down 16.5% year-to-date while the latter is lower by 8.1% for the same period.

The KLPI is primarily the index that measures 42 companies under the plantation companies and among them include the three constituents that are also index constituents of the FBM KLCI itself. This includes Sime Darby Plantation Bhd (SDP) with a market capitalisation of RM23.8bil, IOI Corp Bhd and Kuala Lumpur Kepong Bhd (KLK) with their market capitalisations of RM23.3bil and RM20.8bil, respectively.