Palm oil: Spore palm planters attracting limited interest amid uncertainty over the outlook for CPO prices, on which their earnings are highly leveraged.
Regular top-active Golden Agri off 0.7% at $0.68 in tiny volume of 14 m shares vs its 50-day average of 100 m...
Macquarie remains Neutral on the sector, with stocks currently factoring in CPO price of RM 3150/ton. Current 3-month forward price is RM 3236/ton. Sees higher pdtn pressuring prices in the coming months, though a tight soy complex and rising crude oil prices should provide support...
CLSA says Golden Agri is one of the most leveraged plays on CPO price, with every 10% increase in prices raising its earnings by 27%; says valuations are now attractive after share price corrected 16% ytd, likely on the back of profit taking and Indonesia-specific inflation stoked fears. GGR trades on 11.5X forward P/E, a 20% discount to the sector and 25% discount to Msian peers. Has a Buy call and $0.85 target.
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