It is obvious that big funds are now buying into big cap plantation stocks as ahbah says young bull mah.Yes KLK output is still on the rise while most are on the decline
If US market is holding steady and not dampening Bursa’s market sentiment, this stock can easily cross $5 by the time final QR is out before end of this month.
Top gloves boss also said the same thing hehe Taan is not the only plantations stock that have single digit PE going forward. I like it for its generous div but when the price is high enough to sell we can sell some hehe
JP Morgan 'overweight' on plantations, sees 2-year upcycle TheEdge Tue, Feb 15, 2022 KUALA LUMPUR (Feb 15): ASEAN plantation stocks may be back in vogue, says JP Morgan, noting that foreign investors who are less tied up with sustainability metrics are unable to ignore the strong crude palm oil (CPO) price rally.
The bank upgraded its call on the ASEAN plantation sector to “overweight” and also upgraded its CPO price assumption on Tuesday (Feb 15), citing supply concerns amid years of reduction in new planting.
In a note, JP Morgan Malaysia equities research head Jeffrey Ng said rotation into inflation proxies (commodities) might persist amid “rising interest from non-ESG-bound foreign funds” and low domestic institutional holdings, coupled by prospects of US rate hikes.
This is on the back of consistent cuts in Indonesia’s new planting since 2012, as well as Malaysia’s replanting efforts, which could mean that near-term supply growth will decelerate.
“As we think the CPO upcycle might last over two years due to the reasons mentioned above, we think planters’ valuations have hit an inflection point,” Ng said.
“The sustainability of this rotation hinges on market perception of the CPO price outlook,” he added.
CPO prices settled at a fresh record of RM5,657 per tonne on Tuesday, having scaled new highs this week on expectations of improved demand following India’s import tax cut. The commodity has risen by over 20% this year.
Ng forecasts CPO price to be at around RM5,000 in 2022 and 2023. The assumption is below spot, taking into consideration revenue taxes.
Ng upgraded to “overweight” calls for Sime Darby Plantation Bhd (target price: RM6.80), Kuala Lumpur Kepong Bhd (TP: RM30), and Genting Plantations Bhd (TP: RM12). He also raised IOI Corp Bhd to “neutral” (TP: RM4).
For valuation, the analyst switched to sum-of-parts of lands and downstream assets, from price-to-earnings ratio (PER), citing “the disconnect between share prices and the CPO price”.
“Planters are trading at single-digit PER, free cash flow yields are rising, the average dividend yield is circa 4%, and 2022 might see circa 35% profit growth,” said Ng.
“A rising tide may lift all boats, but we advise investors to pick planters that have well-defined ESG frameworks to avoid negative publicity risk,” he added.
Feb 16): A supply crunch is threatening to cause a spike in prices for the world’s No 1 weedkiller, making it even more expensive for farmers to grow food.
A major supplier of an ingredient in glyphosate — an herbicide that’s widely used by corn, soy, cotton and other farmers around the world — shut down production due to mechanical failures, and repairs could take three months. Bayer AG, the maker of Roundup, whose active ingredient is glyphosate, declared a force majeure on Feb 11, meaning it may not be able to meet its sales agreements.
Farmers are anxious.
Aprosoja, an association of soybean producers in Brazil’s top-producing state Mato Grosso, sent a letter to Bayer’s chief executive officer in Brazil asking for assurances that there will be no shortages of glyphosate. Over 90% of soybeans grown in Brazil are genetically modified to resist glyphosate.
There you go! Another likely setback for soya and corn planting and production. Notwithstanding the wild weather pattern, Will supply of soyoil improve in 2022 ?
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Posted by Pinky > 2022-02-14 13:41 | Report Abuse
love wuhan covid better than love US democrats punya BLM, LGBTQ+, ESG and all those bull feces