DJ MARKET TALK: Plantation Stocks Remain Undervalued - DBS 0513 GMT [Dow Jones] Plantation stocks have yet to be full beneficiaries of crude palm oil's price strength and remain undervalued, DBS says in report. "We still expect global demand for edible oils to continue to grow, backed by population growth, urbanization, higher meat consumption and increasing demand for downstream products as substitutes of animal fats and petrochemicals."
Upgrades FY08-10 CPO price forecasts to : MYR3,350, MYR3,280, MYR3,100 - from MYR3,100, MYR2,610, MYR2,525, respectively. "We believe plantations are becoming more defensive in uncertain times, and our Overweight view on the sector is reiterated once again." Tips stock picks as : Wilmar International (F34.SG), First Resources (EB5.SG), IOI Corp. (1961.KU), Sime Darby (4197.KU), IJM Plantations (2216.KU), Asiatic Development (2291.KU), TSH Resources (9059.KU) and London Sumatra (LSIP.JK).
