KUALA LUMPUR, July 21 — MIDF Research has maintained its ’neutral’ stance on the domestic plantation sector, given the weaker demand from major importing countries.
In a note, the research firm said it remains neutral on the earnings outlook for the sector for the second half of 2023, given the normalisation of crude palm oil (CPO) price.
In July, the CPO price averaged RM3,845 per tonne, declining by 10.6 per cent year-on-year (y-o-y).
The research house said the CPO price saw some support following Russia’s withdrawal from the grain deal and ongoing El-Nino event effects.
“While we foresee that the Russia-Ukraine war could support the CPO price to hover around the RM3,600-4,200 level, we reiterate our expectation that the price should be coming off following high crop seasonality in upcoming months,” said MIDF Research.
Nonetheless, the research firm has maintained its “buy” call on Kuala Lumpur Kepong (KLK) with an unchanged target price of RM26, due to its high oil yield per hectare and having the highest fresh fruit bunches (FFB) yield among its peers. — Bernama
