KUALA LUMPUR: CIMB Equities Research said the earthquake in Japan is near-term negative for agricultural product prices as it may lead to a slowdown in demand and investors may lean towards risk aversion, leading to an outflow of speculative funds.
The research house said on Tuesday, March 15 the medium-term impact is likely to be positive as Japan will need to restock inventories. This event will have a larger near-term impact on rubber prices than CPO as Japan is a more significant consumer of the former.
'As we do not expect the quake to alter average prices significantly, we retain our price forecasts for both CPO and rubber. We, therefore, maintain our earnings forecasts, target prices and recommendations for all the planters.
'The regional PLANTATION [] sector remains a NEUTRAL as we think that CPO price is close to peaking and the sector lacks near-term catalysts. Golden Agri remains our top pick,' it said.
The research house said on Tuesday, March 15 the medium-term impact is likely to be positive as Japan will need to restock inventories. This event will have a larger near-term impact on rubber prices than CPO as Japan is a more significant consumer of the former.
'As we do not expect the quake to alter average prices significantly, we retain our price forecasts for both CPO and rubber. We, therefore, maintain our earnings forecasts, target prices and recommendations for all the planters.
'The regional PLANTATION [] sector remains a NEUTRAL as we think that CPO price is close to peaking and the sector lacks near-term catalysts. Golden Agri remains our top pick,' it said.
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