Malaysia Plantation Sector's 2Q Likely Boosted by Higher Palm Oil Prices — Market Talk

Malaysia's plantation sector could report a better 2Q, supported by sequentially higher crude palm oil prices and stronger production, Maybank IB analyst Ong Chee Ting says in a note. He expects earnings to recover from a seasonally weak 1Q, with CPO prices supported by elevated crude oil prices, higher biodiesel mandates in Indonesia and Malaysia and potential supply disruptions from Indonesia's policy changes. Ong turns tactically positive on Malaysian planters over a three-month horizon, citing clearer earnings visibility and lower regulatory risks compared with Indonesian peers. He remains neutral on Indonesia's growers due to policy uncertainty. Maybank rates SD Guthrie, Sarawak Oil Palms and Genting Plantations as preferred buys. (yingxian.wong@wsj.com)