Palm Oil Report - 7 December 2017 Palm Oil Report - 7 December 2017 | DZHI - DZH International 
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Palm Oil Report - 7 December 2017

  • i2Matrix
  • 7 December 2017
Upbeat outlook for palm oil market to boost agriculture stocks: SGX
 
Steady growth in the palm oil market should boost the eight agricultural product firms listed here, after what has been a lacklustre year.
 
The companies, which have a combined market capitalisation of $29 billion, have performed poorly over the past 10 months.
 
Share prices are down 13.7 per cent on average in the year to date, according to the Singapore Exchange (SGX) yesterday, compared with a 16.7 per cent gain last year.
 
The shares have mirrored palm oil prices, which are down 17.6 per cent in the year so far.
 
Global Palm Resources Holdings, which has shot up 15.4 per cent in the year to date, is the best-performing stock in the sector.
 
The global palm oil market is forecast to grow at a compounded annual rate of 7.2 per cent between last year and 2021, reaching a market value of US$92.8 billion (S$125 billion) in 2021 from US$65.7 billion in 2015, according to a report from Zion Market Research last month.
 
It cited growth drivers such as improving economic conditions, higher living standards and changing eating habits in emerging countries, as well as increased demand for vegetable oil as a feedstock for biodiesel production.
 
7.2%
Expected compounded annual growth rate of the global palm oil market between last year and 2021, according to a report from Zion Market Research.
 
The research firm added that the low price of palm oil, as well as stringent regulations on trans-fat foods in the United States and Europe, have spurred consumers to switch to palm from soya bean and other vegetable oils.
 
Palm oil prices for the rest of this year are projected to remain firm, given the seasonally strong fourth quarter, said Bloomberg Intelligence.
 
A further boost could come from weaker-than-expected output, and an anticipated cut in Europe's import tariffs for Indonesia's biodiesel.
 
The SGX classifies agricultural products under consumer staples, a defensive sector: "This year, defensive sectors have underperformed, as funds rotated out of defensives into cyclical stocks."
 
Wilmar International, the world's largest processor and seller of palm and lauric oils, reported a 5.7 per cent year-on-year decline in net profit to US$37 million for the three months to Sept 30.
 
The better performance in oilseeds and grains, and strong contributions from associates were offset by weaker results in its tropical oils and sugar businesses.
 
Revenue edged 0.4 per cent higher to US$11.1 billion, supported by increased sales from oilseeds and grains.
 
-- The Straits Times

 

 

 

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THE PEOPLE

Benny Lee

Founder of i2Matrix. A market strategist, private trader and sought-after financial speaker and trainer in the Asian Region, Benny Lee has coached hundreds of professional and retails traders and investors in Malaysia, Singapore, Hong Kong, Thailand, Vietnam, Pakistan for more than 13 years. His passion in trading and chart analysis leads him to develop trading strategies that have helped him and many others to trade and invest successfully in the financial markets.

Benny Lee is recognized by the Malaysian and Singapore Stock Exchange as a Credible Trainer. He has also trained professionals in Malaysia under Securities Commission’s Continuous Professional Education (CPE) Program. He is also a market strategist Jupiter Securities Sdn Bhd, a Malaysian stock-broking firm.

Benny has been invited to share his expert opinion in major commodities and financial events in Malaysia, Singapore, India, Indonesia, Vietnam, Thailand, and Romania. His analysis on the financial markets can also be found on a regular basis in leading financial magazines like Smart Investor, Shares Investment Magazine and The Edge Daily in Malaysia, and Pulses Magazine in Singapore. He has also appeared on TV Financial Programs such as Capital TV (Malaysia), Channel News Asia (Singapore) and Sunbiz (Pakistan) to share his views about the markets and technical analysis.

Today, you can find his market comments regularly on The Financial Edge Daily (Wednesdays), Interview on BFM89.9 (www.bfm.my) business radio station on Mondays at 9.00 am, The Busy Weekly, a Chinese business weekly and Palm Oil Fortune (A monthly magazine by the Malaysian Palm Oil Council, MPOC). His views are also regularly quoted on Bloomberg.

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Benny Lee's interview with Bloomberg Malaysia