MaT KeDaH

Bloomberg reported that Crude Palm oil futures fell 5.5% this week with August delivery contract closed at RM 3,096 a tonne for the week on the Malaysia Derivatives Exchange due to concerns that investors will hold back purchases in view of the uncertainty and slowing economies.

Throughout the week, major palm oil companies stock prices suffered the most losses stemmed from poor quarterly earnings results. On 25 April, TH Plantations reported decline of 40% in net profit to RM 13 million affected by higher production costs.

THPLANT stock price dropped 21% since 25 April to week low of RM 2.22 on 10 May and closed at RM 2.34 for the week.

On 15 May, United Plantations announced its Q1 2012 net profit fell 15.6% on higher wages and lower selling prices of CPO. In its quarterly announcement, it also stated that it anticipates CPO prices to weaken in second half of 2012 due to recovery in the biological yield cycle coupled with more favourable weather conditions

UTDPLT stock price dropped 5.2% since 15 May to week low of RM 23.70 on 18 May and closed at RM 24.20 for the week

On 16 May, Tradewinds Plantations announced quarterly earnings fell 91% to RM 4.34 milliondue to lower sales at unfavourable palm products prices, revenue rose 164% to RM 608.45 million due to contribution from Mardec Bhd

TWSPLNT stock price dropped 16.8% since 16 May to week low of RM 4.74 on 18 May and closed at RM 5.01 for the week.

Even for Kuala Lumpur-Kepong (KLK), which has not announced their quarterly results yet, suffered stock price decline of 9% to week low of RM 21.50 and closed at RM 22.10 for the week. Market anticipated KLK to suffer the same fate as its peers. KLK is scheduled to announce their results next week on 24 May.