Timber sector may have bottomed

According to the latest ITTO Tropical Timber Report for the month of April, timber prices remained weak but steady due to difficulty in timber extraction because of thunderstorm (see the table below). As a sign of the difficult time, Sarawak government reduced 2009 timber royalty to a flat rate of RM50 for all timber with a diameter of 30cm or more, after raising to RM65 four months ago.


Chart 1: Movement pf Prices of Timber Products from Jan 2008 to Mar 2009

Despite the above observation, the prices of timber stocks has begun to recover. I have posted on the technical breakout for WTK earlier (here). In addition, Lingui has a bullish breakout above its medium-term downtrend line at the RM0.65 two days ago. Other timber stocks may do the same & recover from their extremely oversold position, just a short 2 or 3 months ago.


Chart 2: Lingui's weekly chart as at 15/4/2009 (Source: Quickcharts)