Golden Agri

Golden Agri: is up 2.8% at $0.725 in active trade and among the STI's best performers, as cyclical stocks such as commodity plays fare well amid growing expectations that European leaders may deliver potential breakthrough measures for the European debt situation, which could boost these beaten-down stocks. And while the outlook for CPO prices is mixed at best amid heightened macro uncertainty, there are still some positive voices, such as Daiwa's. The house keeps its non-consensus bullish call on CPO prices, saying 1H12 CPO fundamentals should improve on a tighter stock-to-use ratio, and "any improvement in macro factors would allow CPO fundamentals to drive up prices." It continues to expect CPO prices to peak at about US$1,400/ton by end-1H12 and says over the past month, as plantations' yields have dropped, CPO demand-supply fundamentals have improved. Daiwa prefers planters to processors, the former being the primary beneficiaries of higher CPO prices. It keeps Golden Agri and First Resources at Outperform, with Mewah , Indofood and Wilmar at Hold.