By Aidila Razak
Felda Global Ventures flattened out at RM4.58, three sen higher than its initial public offering price, at 4.30pm today after surging 14 sen to a high of RM4.62 yesterday.
Analysts say there are a combination of reasons why the stock, which has been on a downward trend and stayed mostly under water in 2013, suddenly saw a sudden boost.
Among others, they said the Palm Oil Conference which concluded in Kuala Lumpur yesterday gave some certainty on the outlook of CPO prices.
This, said JF Apex Securities Sdn Bhd, gave a boost to the Plantation Index which rose 119.26 points yesterday.
The planters also rode buying trend which boosted the FBM KLCI almost 10 points yesterday, the broking house said in a note.
An analyst with Public Investment Bank Bhd said that while the upcoming general election has set a cautious tone among investors, there is no shortage of funds.
“The market is flush with excess cash so investors are looking at stocks for short term trading, like FGV which saw a two-day uptrend and Genting Plantations which has been chased by short-term investors for the past three days,” he said.
He said that Genting Plantation is a favourite among those looking at plantation stocks due to its large unused landbank, while FGV’s sudden spike could be related to good news on its Lahad Datu operations.
Its management had yesterday said that its two refineries are still operating, and that the hostilities only impact about 2000-ha of its mammoth 95,542-ha Felda Sahabat plantation.
He added that FGV’s sudden upshot and subsequent dip is “within expectations” as the stock is “volatile due to political risk exposure”.
“It is expected to trend at around RM4.45 to RM4.60,” he said. It debuted at RM4.55.
Public Investment Bank maintains its hold call on FGV with a target price of RM4.25. It shares its views with most research houses covering the stock.
Kenanga, however, has a sell call on most of the plantation counters including FGV due to lower CPO outlook coming out of the Palm Oil Conference 2013.
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