KUALA LUMPUR: CIMB Equities Research remains Neutral on the Malaysian PLANTATION []s sector while Sime Darby remains its top plantation pick in Malaysia and Wilmar its top regional pick.
It said on Tuesday, July 12'' Malaysia's palm oil stock climbed 7% on-month to an 18-month high of 2.05 million tonnes in June. As it was 3% above the research house's estimate but 4% below consensus expectations, this was a neutral event.
'But we continue to expect CPO prices to trend lower, possibly to below RM3,000 per tonne in the coming month as we estimate a 2% on-month uptick in palm oil stock in July.
'We also flag the 2-4% downside risk to the 2012 earnings of the Malaysian planters if they follow Sime in raising the salaries of their Malaysian estate workers by RM200 per month,' it said.
CIMB Research said pending confirmation, it makes no changes to its earnings estimates.
It said on Tuesday, July 12'' Malaysia's palm oil stock climbed 7% on-month to an 18-month high of 2.05 million tonnes in June. As it was 3% above the research house's estimate but 4% below consensus expectations, this was a neutral event.
'But we continue to expect CPO prices to trend lower, possibly to below RM3,000 per tonne in the coming month as we estimate a 2% on-month uptick in palm oil stock in July.
'We also flag the 2-4% downside risk to the 2012 earnings of the Malaysian planters if they follow Sime in raising the salaries of their Malaysian estate workers by RM200 per month,' it said.
CIMB Research said pending confirmation, it makes no changes to its earnings estimates.
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