“As we have no idea of knowing the extent of this intrusion and how long it will last, we are not revising up our CPO price assumptions as yet. However, we are upgrading our sector weighting to ‘neutral’, given the knock-on effect on commodity prices and, therefore, earnings and valuations of the planters.
RHB Group Research analyst Hoe Lee Leng has upgraded her plantation sector call from “underweight” to “neutral” as the geopolitical risk of war has become a reality, causing all commodity prices to spike up.
In her Feb 25 note, Hoe says crude oil prices have shot past US$100 per barrel while crude palm oil (CPO) futures prices have shot past RM6,500 per tonne.
