RHB Investment Bank expects CPO prices to stay range-bound near term, amid peak production season and elevated stock levels. CIMB Securities sees the recent weakness in CPO and plantation stocks as an opportunity to accumulate selected names.
Why Are Analysts Eyeing Plantation Stocks for 2027?
The outlook improves from the first quarter of 2027, as output begins to moderate significantly due to the El Niño weather phenomenon. Until then, RHB Investment Bank expects prices to remain range-bound.
What Are RHB Investment Bank’s CPO Price Assumptions?
RHB Investment Bank has left its forecasts unchanged at RM4,400 per tonne for 2026 and RM4,500 per tonne for 2027. The research house expects the turn to come from inventories.
“Once stock levels start to diminish from the current highs, CPO prices could trend upwards in 1H2027 (first half of 2027),” the research house said in a note to clients.
Which Plantation Stocks Does CIMB Securities Prefer?
CIMB Securities keeps buy calls on four preferred Malaysian names and maintains its overweight sector rating.
- IOI Corp Bhd (KL:IOICORP)
- Kuala Lumpur Kepong Bhd (KL:KLK)
- Genting Plantations Bhd (KL:GENP)
- Hap Seng Plantations Holdings Bhd (KL:HSPLANT)
CIMB Securities names stronger-than-expected CPO prices as its key upside risk. The downside risk is weaker fresh fruit bunch (FFB) production if drought persists into 2027 and intensifies across Malaysia.
The article gives no company-level earnings, margins or valuations, so the case for these stocks rests on CPO prices and supply.
What Supply Risks Sit Behind a 2027 Tightening?
RHB Investment Bank flags Indonesia’s push to raise its biodiesel mandate from B50 to B60 as a supply factor. It also flags rising regulatory risks in Indonesia.
Under the draft Agrarian Reform Law, either 20% of land would need to be redistributed or a mandatory profit-based payment would have to be made. The draft says the ruling is not retroactive, yet uncertainty remains for existing landowners.
RHB Investment Bank warns that if the law is implemented, “productivity in Indonesia will be affected negatively, thereby causing further supply tightness.”
Key Takeaways
- RHB Investment Bank sees the CPO outlook improving from the first quarter of 2027 as El Niño moderates output.
- RHB Investment Bank’s assumptions are RM4,400 per tonne for 2026 and RM4,500 per tonne for 2027, both unchanged.
- CIMB Securities keeps buy calls on IOI Corp, KLK, Genting Plantations and Hap Seng Plantations.
- Watch Malaysian drought conditions, Indonesia’s B60 biodiesel plan and the draft Agrarian Reform Law.
This is general information, not investment advice. Do your own research and check company filings before deciding anything. You can cross-check the figures with AI Stock Analysis for Malaysians.
Frequently Asked Questions
What CPO price does RHB Investment Bank assume for 2027?
RHB Investment Bank assumes RM4,500 per tonne for 2027, unchanged from its previous assumption. It expects CPO prices could trend upwards in 1H2027 once stock levels diminish from current highs.
Which plantation stocks does CIMB Securities prefer?
CIMB Securities prefers IOI Corp Bhd (KL:IOICORP), Kuala Lumpur Kepong Bhd (KL:KLK), Genting Plantations Bhd (KL:GENP) and Hap Seng Plantations Holdings Bhd (KL:HSPLANT). It retained buy calls on all four and keeps an overweight sector rating.
Why could CPO supply tighten in 2027?
RHB Investment Bank links a possible tightening to El Niño, which could moderate output from the first quarter of 2027. It also flags Indonesia’s plan to raise its biodiesel mandate from B50 to B60 as a risk.
What does the draft Agrarian Reform Law require from Indonesian planters?
Under the draft, either 20% of land would need to be redistributed or a mandatory profit-based payment made. The draft says the ruling is not retroactive, but uncertainty remains for existing landowners.
Source: View Original Article — The content is based on the original publisher. Refer to the original content for accurate info. Contact us for any changes.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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