Credit Suisse upgrades 2008 average palm oil price forecast to MYR3,600/tonne from MYR2,800, raises 2009 forecast to MYR3,300/tonne from MYR2,500; 2010 forecast at MYR3,000. Notes spot palm oil prices at record highs, surpassing MYR4,000/tonne. Says inflation-adjusted spot palm oil prices similar to last peak in 1998. "As fundamentals today are stronger than they were in 1998, there could be room for palm oil prices to surge further ahead." Says remains bullish on palm oil stocks in medium term; keeps Overweight on sector; however, notes rising short-term risk of technical correction. Raises earnings forecasts for palm oil stocks across the board by 6%-46%. Says prefers Malaysian plays to Indonesian on lower sovereign risk as government historically less intrusive; better infrastructure; better sustainability track record. Tips Indonesia's biggest risk factor as possibility government may continue to hike palm oil export tax. Tips top Malaysia pick as IOI Corp. (1961.KU), rated Outperform with MYR10.00 target price; top Indonesia pick as London Sumatra (LSIP.JK), rated Outperform with IDR17,000 target price.
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ReplyDeleteMarch 04, 2008
Credit Suisse upgrades 2008 average palm oil price forecast to MYR3,600/tonne from MYR2,800, raises 2009 forecast to MYR3,300/tonne from MYR2,500; 2010 forecast at MYR3,000. Notes spot palm oil prices at record highs, surpassing MYR4,000/tonne. Says inflation-adjusted spot palm oil prices similar to last peak in 1998. "As fundamentals today are stronger than they were in 1998, there could be room for palm oil prices to surge further ahead." Says remains bullish on palm oil stocks in medium term; keeps Overweight on sector; however, notes rising short-term risk of technical correction. Raises earnings forecasts for palm oil stocks across the board by 6%-46%. Says prefers Malaysian plays to Indonesian on lower sovereign risk as government historically less intrusive; better infrastructure; better sustainability track record. Tips Indonesia's biggest risk factor as possibility government may continue to hike palm oil export tax. Tips top Malaysia pick as IOI Corp. (1961.KU), rated Outperform with MYR10.00 target price; top Indonesia pick as London Sumatra (LSIP.JK), rated Outperform with IDR17,000 target price.