Sunday, April 4, 2010

Plantations & O&G

KUALA LUMPUR: A positive US labour market report and improved corporate earnings could be the catalysts for the key Asian markets including Bursa Malaysia on Monday, April 5.

Reuters reported US non-farm payrolls report showed the economy added 162,000 jobs in March, the fastest pace of growth in three years.

Analysts said the biggest increase in employment in three years is the strongest indication the deepest U.S. recession since the 1930s has ended.

At Bursa Malaysia, blue chips which are expected to continue their upwards trend would be banking stocks including CIMB, PLANTATION []s as crude palm oil prices extend their gains and also oil and gas (O&G) related companies as light crude oil holds steady about the US$80 mark.

Stocks to watch on Monday include the call warrants over ANN JOO RESOURCES BHD [], (ANNJOO-CW), Berjaya Corp Bhd (BJCORP-CW), Wah Seong Corp Bhd (WASEONG-CW) and Genting Singapore plc (GENS-CW) which are issued by AmInvestment Bank Bhd.

he firm CPO prices, which are expected to rise in the medium-term, are expected to continue to generate interest in plantations including Kuala Lumpur Kepong, IOI Corp and PPB GROUP BHD [], which has exposure via Singapore-listed Wilmar.

Smaller plantations may also benefit if CPO prices continue to show an upward trend.

Most O&G counters have been lagging behind the banks and plantation stocks in the recent run-up and with the crude oil firmly above the US$80 per barrel, this could spark more interest in the O&G players. Stocks to watch include Kenanca Petroleum, Dialog Group, Wah Seong Corp Bhd.

Written by Joseph Chin

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