Chart 1: CPO's weekly chart as at Oct 17, 2013 (Source: ifs.marketcenter)
FBMPalmOil index, which has been moving sideway for the past 9 months, could enter into an uptrend once CPO prices trend higher. FBMPalmOil index comprises the constituents of the FTSE Bursa Malaysia EMAS Index that derive substantial revenue from palm oil activities that meet the stated eligibility requirements.
Chart 2: FBMPalmOil's weekly chart as at Oct 18, 2013_11.00am (Source: Quickcharts)
I do not have any plantation stock in mind though I am a bit surprised by KMLoong's price performance as well as the small drop in its bottom-line (as compared to huge drop in other plantation companies). If it can surpass its recent high of RM2.50, KMLoong may continue with its prior uptrend.
Chart 3: KMLoong's weekly chart as at Oct 18, 2013_2.45pm (Source: Quickcharts)
Based on the above, I believe that you should pay close attention to plantation stocks as I feel that this sector could benefit from a rally in CPO prices if the CPO can breach the RM2500 level.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, FBMPalmOil index or plantation stocks.
Alex,
ReplyDeleteWhat is your opinion on FIMACOR ?
FIMACOR might not have much land to expand further but at current price [RM 6.4] and EPS[65 sen], PE is around 10. Debt is negligible but cash position is at a whopping RM 220 million [or RM 3 per share]. Dividen is consistently 30 cents for past 3 years. I see it as deeply undervalued.
Hi Big Sea
ReplyDeleteThank you for your thoughts on FIMACOR.
It looks like it is poised for the next upleg. It broke above its intermediate downtrend line as well as the horizontal line at RM6.00 in July. Thereafter, it slid back to test the overcame downtrend line at RM5.85 and recovered. Its immediate resistance is at RM6.40 and then its all-time high of RM6.70. If it can break the all-time high, its uptrend would accelerate.