KL Kepong holds steady footing on Bursa

 

PLANTATION firm Kuala Lumpur Kepong (KLK) has maintained its steady footing on Bursa Malaysia today following the firmer crude palm oil (CPO) futures closing on encouraging export data released by cargo surveyors.

It rose by 20 sen to close at RM15.50, after opening two sen higher at RM15.32.

KLK recorded its biggest jump of 32 sen to RM15.62 17 minutes into its trading. However, this has not deterred OSK Research from recommending a 'sell' on the stock at a target price of RM11.60.

In a research note, OSK said the stock's KLK's valuations were not cheap enough to buy, especially given its expectation of lower CPO price next year.

OSK, however, said it liked KLK for its strong production growth and improving oleochemical business.

Another research house, ECM Libra, has recommended a 'hold'. It said while next quarter should see better earnings from the bumper crop in October, the full financial year for 2010 would see a growth in fresh fruit bunches from newly-matured hectarage in Indonesia.

"We expect some 5.5 per cent growth that will be driven by the 45,000 hectares of estates progressively going into maturity," it said.

ECM Libra said in terms of other catalysts, KLK was understood to be still on the lookout for new hectarge that would be able to synergise with their current estates, particularly in Sumatra. - Bernama