The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Shares of Sarawak Oil Palms Bhd (SOP) rose to their highest level in a month on Friday following a strong second-quarter performance that exceeded market expectations. The stock climbed as much as 3.5%, reaching RM2.92, its highest since July 30, before trading at RM2.89 at 10 a.m., with a market capitalization of RM2.57 billion.
Key Takeaways:
Strong 2Q Results Boost Investor Confidence: SOP's net profit for the second quarter of FY2024 more than doubled year-on-year to RM105.68 million, bringing the total net profit for the first half of the fiscal year to RM185.14 million. This performance was well above both RHB Investment Bank’s forecast and the consensus estimate, prompting RHB to maintain its 'buy' call and raise its earnings forecasts for SOP.
Positive Outlook for the Second Half of 2024: With production ramping up and unit costs moderating, RHB Investment Bank expects stronger financial results for SOP in the second half of FY2024. Seasonal factors are also expected to drive higher output of palm fresh fruit bunches (FFB), which typically peak in October, boosting sales and profitability.
CPO Price Increase and Refining Outlook: SOP has benefited from rising crude palm oil (CPO) prices, which reached a peak of RM4,336 earlier this year. Maybank Investment Bank expects SOP's refining outlook to remain resilient, with increased availability of CPO improving refining utilization and margins. However, Maybank IB anticipates a slower pace of FFB production growth in the second half due to a higher base of comparison.
Overall, the strong second-quarter results and positive outlook for the remainder of the year have bolstered investor confidence in SOP, leading to a notable increase in the company's share price.
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