Market Outlooks as at October 4, 2012

FBMKLCI rebounded strongly with recovery in the plantation stocks on reports that the government may consider a proposal to lower export duty on crude palm oil from 23% now to 8-10%. For more, go here. The impact of this reduction (when approved) would allow export to sell more of their products as compared to the Indonesian exporters which is currently subject to a lower export duties of 13.5%. This proposal may or may not have any impact on the price of CPO. Currently, the Malaysian CPO is stuck on shore and this is a drag on plantation companies & downstream players. By lowering the duties & freeing up the stocks for export, the international market will be affected.

This morning, FBMKLCI jumped 11 points to 1661 as at 11.00am. This means that FBMKLCI has broken above the recent high of 1650. This breakout means that the index will likely to continue its uptrend.


Chart: FBMKLCI's daily chart as at October 4, 2012_11.00am (Source: Quickcharts)