KUALA LUMPUR, Aug 18 — Plantation stocks on Bursa Malaysia were traded mostly lower today on news that Indonesian lawmakers are looking to restrict foreign ownership of plantations to no more than 30 per cent from the current maximum of 95 per cent.

Malaysian companies which own plantations in Indonesia are most likely to be the biggest losers if the government’s plan to cap foreign ownership materialises.     

RHB Research said the proposed move would impact Malaysian companies such as Sime Darby Bhd, Kuala Lumpur Kepong Bhd and TSH Resources Bhd, which are receiving significant earnings contributions from their Indonesian operations.

As at 4.03pm, the Plantation Index fell 71.96 points to 8,797.34 points.

Sime Darby Bhd eased 20 sen to RM9.51, Kuala Lumpur Kepong Bhd slipped 20 sen to RM23.10 and TSH Resources declined seven sen to RM3.48.    

Meanwhile, Maybank Investment Bank Bhd said the proposal would not only affect Singapore and Malaysian-listed groups with plantation estates in Indonesia, but also Indonesian-listed companies that are substantially owned by foreigners.

Given the scale of the potential equity sale, Maybank Investment Bank said the move would weigh heavily on the sector with a valuations de-rating as prospective Indonesian buyers will have the bargaining power, thus causing massive selling pressure. — Bernama