Personal View on KLCI and FCPO

KLCI

Stock markets likely to have technical rebound this week and KLCI might challenge above 1630. May monitor below stocks for short term play:

1. Tambun
2. Daibochi
3. Uemland
4. Benalec
5. Gamuda
6. Johotin
7. Kianjoo
8. Ingress
9. Maybank
10. P & O
11. Uoadev

FCPO

1. Althought Malaysia government will rise the export tax of cpo from march onwards, however, the export doesnt seem to pick up. Traditionally, December, January and February used to be CPO low production month, however, the stockpile merely drop a little bit.

2. Besides, stockpile in china port also at historical high now, 1.33 million tonne. Thus, china would need to find way to reduce the stockpile also as palm oil products in china are saturated now and facing strong competition from corn oil as well.

3. With lower export, production of cpo going to pick up soon, china need to clear stockpile, all these will cap cpo price with limited upside and probably cause the price lower to stimulate buying interest.

Conclusion: Bearish view on FCPO, and anticipate the price to drop below RM2500 (May Contract) this week.