MIDF Research favours plantation stocks such as that of Sime Darby Bhd, IOI Corp Bhd and Kuala Lumpur Kepong Bhd as their sizeable plantation areas would provide a higher potential earnings growth.

MIDF research has also upgraded its recommendation for Kulim (Malaysia) Bhd and Sarawak Oil Palm Bhd from neutral to buy as the fundamentals of these companies remain strong.

Our buy recommendations for all plantation stocks under coverage remain driven by an improvement in yield, as more trees reach maturity and increase in fresh fruit bunches production, with the weather expected to recover in the second half of 2011, it said in a research note today.

The research house has maintained a positive call on plantation stocks and reiterated that the average CPO price for 2011 is forecast at RM3,400 per metric tonne. -- Bernama