Lack of catalysts forecast for palm oil sector


PETALING JAYA: Hong Leong Investment Bank Bhd Research (HLIB Research) has maintained its “neutral” call on the plantation sector as the absence of a notable demand catalysts has indicated that current high palm oil price will not be sustainable in the long term.

In a report, HLIB Research said palm oil’s narrower price discount against soy oil is due to impending seasonal output recovery and the lack of demand, among other factors.

The research firm noted the US Department of Agriculture’s National Agricultural Statistics Service’s prospective planting report revealed that US farmers plan to plant 90 million acres of corn and 86.5 million acres of soybean in the planting season.

The projected corn planted area came in slightly below the average trade estimates of 91.8 million acres, while the projected planted area for soybean came in within the average trade estimate.

HLIB Research’s top sector picks are IOI Corp Bhd with a “buy” rating and target price (TP) of RM4.66 a share and Hap Seng Plantations Holdings Bhd with a “buy” rating and a TP of RM2.06.

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Business News

Malaysia-Japan trade set to rise this year - Tengku Zafrul
Global trading platform Webull expands to Malaysia
Maybank 1Q earnings up 9.8% on higher core fees
MPI set for strong show
Investors rush to grab piece of US$1.8 trillion UK pensions pie
Starwood’s US$10bil REIT turns to survival mode as pain lingers
Damned if you do, damned if you don’t
US stock changes affect Asia forex trades
Consistency in a sea of change
Impact of AI on jobs

Others Also Read