24.03.2020 (The Star Online) - PETALING JAYA: Heavily battered along with the broader market, plantation stocks on Bursa Malaysia now appear attractive in terms of valuation.
In its report yesterday, TA Securities Research termed the sector “absurdly cheap, ” with stocks under its coverage trading at 9.3 to 22.2 times estimated earnings for 2021.
“The fear of Covid-19 pandemic and global recession have caused significant sell-off in the market, including plantation stocks. Most of the plantation stocks are now at attractive valuations after the recent massive plunge, ” the brokerage wrote.
Overall, Bursa Malaysia’s palm oil plantation index has been trending down since the start of 2020, and after a relatively strong rally in the second half of 2019.
Year-to-date, the benchmark index for plantation stocks has fallen by about 26%.
Reiterating its “overweight” recommendation on the plantation sector, TA Securities rated most stocks in the sector as “buy”.
These included Sime Darby Plantation Bhd, Kuala Lumpur Kepong Bhd